How to Start an LLC in New York: Cost to Form an LLC in New York 2021
Knowing what it costs to start an LLC in every state is a very crucial step in gearing your business in the right direction. Today, we are here to answer one question that most people usually ask: how much does it cost to set up an LLC in New York?
Our LLC New York cost review offers more than just the most common fee associated with setting up an LLC in New York. We also guide you through step by step New York LLC formation.
Filing Requirements & Overall New York LLC Costs
Forming a New York limited liability company (LLC) and keeping it in good standing will have to cost you some money. Overall, the state is not the cheapest to form an LLC but it will be worth it for a New York-based business. Here are some of the most common LLC requirements that you will have to spend on when forming an LLC in the state.
New York LLC Filing Fee
To form your LLC in NY you must file articles of organization with the Department of State at a $200 filing fee. This is the main filing requirement when forming your New York LLC.
Normally, processing your application may take around 4-6 weeks in New York. Thankfully, for someone in a hurry to form a business in New York, the state offers expedited filing fees at additional cost.
New York LLC Annual Report
New York requires LLCs to file a biennial statement with the secretary of state to keep their company in good standing with the state. This is also called a biennial report and it only costs $9 to file. The best part, it is due every two years from the date an LLC was formed, unlike other states where you will have to file reports yearly.
Registered Agent Fee
New York LLCs must have registered agents that will collect important documents on behalf of your company. A registered agent in New York can be a third-party individual, a business entity, a member of your company, or yourself. While being your own agent will be cheaper, hiring a professional comes with more advantages, and the charges will depend on the professional service you choose. However, be ready with $50 to $300 per year to get this service in New York.
Application for Withdrawal (Foreign LLC)
Normally, you will have to pay $60 to file the article of dissolution and you will have it processed within 7 business days in New York. But if you want things to go a bit faster, you will have to pay a $25 additional fee.
Some businesses require licenses and permits in order to operate in New York. For a limited liability company, no county-specific fee will be required. All you need to do is to pay $25 fees to get licenses and permits for your business.
New York LLC members must pay state income tax on distribution that they earn from the company. All the New York LLC members who take profit from the LLC will also pay self-employment tax towards social security or medicare. The current self-employment tax is 15.3%.
Thankfully, New York does not charge franchise tax on LLCs. Instead, they impose annual filing fees on LLCs which vary depending on your LLC gross income. The fee ranges between $25 – $4,500 and is paid to the Department of Taxation and Finance using Form IT-204-LL.
Other LLC Filing Costs
In addition to the mandatory charges that have been discussed above, there are other optional filing fees associated with starting an LLC in New York.
LLC Name Reservation Fee
If you have a nice name in mind and you are not ready to set up an LLC just yet, you can have the name reserved by the New York Department of state for 60 days. All you need to do is to file an application for a reservation of the name with the Department of the state.
When completed, you will have to submit the application together with the filing fee of $20 to the NYS Department of State.
“Doing Business As” (DBA) Name
If you are planning to run your New York LLC with a different name from your official business name, you’ll need to register a DBA. For an LLC, you must file a certificate of the assumed name with the NY Department of State at the following address:
NYS Department of State Division of Corporations, State Records and Uniform Commercial Code One Commerce Plaza 99 Washington Avenue Albany, NY 12231. The state only charges a $25 filing fee.
Business Domain Name & Website
A business domain name is the web address for your business website. It puts you in the same marketplace as your competitors. You need to register a domain name for your New York LLC so that nobody else can use the same name.
A domain name registration can cost you anywhere between $2 to $20 depending on special offers or discounts offered. However, newer domain name extensions such as apps. may go beyond this range.
Articles of Organization Fee
You need to file articles of organization with the New York secretary of state in order to set up and run a business in the state. The cost of Filing New York articles of organization is only $200.
However, New York requires that you publish a copy of the articles of the organization or a notice related to the formation of your business in two authorized newspapers so that you obtain a certificate of publication. Filing for Certificate of Publication Form 1708-f  will cost you $50. New York LLC publication certificate form must be submitted along with your affidavits of publication to the New York State Department.
Hiring an attorney to help you form an LLC and answer questions will offer you peace of mind. Attorney charges vary, but you should expect something between $500 – $2,000 flat fee or $150 – $350 hourly fees.
Tax ID Number (EIN)
An Employer Identification Number (EIN) is essentially a social security number for an organization. You will have to get an EIN to help you open an account, file and manage federal state taxes, and hire employees. You can get an EIN for your New York LLC for free from the IRS by applying online.
The Top 2 New York LLC Services
Zenbusiness will help you prepare and file your articles of organization with the New York Department of state at affordable charges. Despite their cheaper packages, they will offer you a free registered agent service for 1 year.
In addition, the company offers a worry-free guarantee feature that includes preparation and filing of your annual report, and two amendments per year.
ZenBusiness’s other biggest win is its reliable customer support service. As a result, the company boasts the best customer feedback .
IncFile free formation basic package makes it the cheapest LLC formation service for someone who just wants to form an LLC in New York. With the free package, you will get all the necessary business formation services. The best part, they include the 1-year free registered agent service in their free package as well.
Other services offered in addition to filing an article of the organization include name search, preparation of an operating agreement, obtaining an EIN, company alerts on annual report deadline, licenses, statement of formation among others. The company also boasts a 1-day processing speed and great customer support.
For that reason, they have one of the best online feedback  among users.
How to Start an LLC in New York
- Name Your New York LLC
- Choose Your Registered Agent
- File Articles of Organization
- Prepare an Operating Agreement
- Obtain an EIN
- File Annual Reports
Step 1: Name Your New York LLC
The name of the LLC must be available for use in the state of New York and meets other New York state requirements. To achieve that, you will have to conduct a thorough online name search on databases such as corporations’ state records to ensure you pick on a suitable name for your business.
Step 2: Choose Your Registered Agent
New York LLCs are required to appoint a registered agent that will receive important documents on behalf of the company. A registered agent can be an entity, a third-party individual, a member of your company, or yourself.
Step 3: File Articles of Organization
To form an LLC in New York, you must file articles of organization with the New York Department of State. The form requires basic information mostly name and address and you will submit the form to the Department of State along with the required filing fee as mentioned above.
Step 4: Prepare an Operating Agreement
You will need to create an operating agreement that outlines the ownership and operating procedures of an LLC. Operating agreements ensure that business owners are on the same page and reduce the chances of feature conflict.
Step 5: Obtain an EIN
Employer Identification Number (EIN), is like your company’s social security and it is very important. You will need an EIN to open a business bank account, file and manage federal tax as well as hire employees in New york. You can download an EIN form from the IRS website for free.
Step 6: File Annual Reports
New York has to keep up-to-date business records. They do this by ensuring a New York LLC files a biennial statement with the New York Department of state every 2 years.
From our LLC New York cost review, it is clear that New York is not among the cheapest states to form an LLC. Their filing fee is high and their taxation is not friendly either. However, we loved their annual report filing charges. With that said, we would recommend the state for a New York-based business; for a foreign LLC, you may consider other states.
Frequently Asked Questions
You will have to incur some annual fees to keep your company in compliance with the state. You will have to pay taxes, annual report fees in some states, pay for a registered agent service among other services.
The cost to form an LLC in New York is $200 which is paid to the NY Department of State while filing articles of organization. In addition to this LLC formation fee, you will incur some annual fees depending on your business and state requirements.
The default tax rate in New York is 6.3%. However, a lower or a higher tax rate can apply depending on the type of your business. For instance, LLC members will pay income tax at the rate of 8.82% and may also pay self-employment tax at the rate of 15.3%.
The processing of your application may take around 4-6 weeks in New York. However, the state also offers expedited filing and can process your filing as fast as 2 hours.
If your business operates in New York, it is a good idea to form your business within the state. Just because some states like Delaware or Wyoming have lower fees doesn’t mean you should form your LLC there. You may end up having to legally do business in your home state and having to file two LLCs.
+ 3 sources
- State, N. (n.d.). CERTIFICATE OF PUBLICATION OF. [online] . Available at: https://dos.ny.gov/system/files/documents/2019/01/1708-f.pdf [Accessed 13 Aug. 2021].
- Trustpilot. (2021). ZenBusiness. [online] Available at: https://www.trustpilot.com/review/www.zenbusiness.com [Accessed 13 Aug. 2021].
- Shopperapproved.com. (2021). IncFile.com Reviews | Shopper Approved. [online] Available at: https://www.shopperapproved.com/reviews/IncFile.com [Accessed 13 Aug. 2021].