How Much Does it Cost to Start an LLC in New York?

If you’re thinking of starting a limited liability company (LLC) in New York, you’ll want to know in advance how much it’s going to cost. LLC formation fees vary by state, so it’s wise to do a bit of research and prepare yourself, and your new business, for the necessary steps. 

Articles of Organization Cost

In New York, you form an LLC by filing articles of organization, which requires a $200 fee. It’s a simple process you can do online by logging into the On-Line Filing service provided by the Department of State. 

If you need a certified copy of the Articles of Organization, there is a $10 fee. If you need a Certificate of Status, there is a $25 fee. If you’d like the state to hold your LLC name before you register, you can fill out the form here for $20 to reserve it for 60 days. 

Completed paper forms and their accompanying fees should be sent to:

New York Department of State
Division of Corporations
One Commerce Plaza, 99 Washington Ave
Albany, NY 12231-0001

Registered Agent Cost

In New York, your business is required to have a registered agent, also known as an agent of service in process. A registered agent is a person or business authorized to accept and respond to legal, tax, and financial documents on behalf of your business.   

Essentially, the purpose of a registered agent is to ensure compliance with state laws and to make sure all official matters are handled correctly and in a timely manner. Having one person or entity responsible for state documents helps ensure nothing is missed, avoiding potential potholes.

Documents your agent may receive include:

• Tax forms and documents
• Government correspondence
• Legal documents
• Summons documents in case of a lawsuit

In New York, you can be your own registered agent, or it can be another member of the LLC. An individual who is not a member or a professional agency can also serve as the registered agent for your LLC. 

Using a Registered Agent Service 

A registered agent service is a professional service that will handle official correspondence and documents for your business. Registered agents ensure that all official correspondence is handled on time and properly filed. They also keep track of deadlines and send reminders of things you need to file, such as tax forms and annual reports.

You need a service that has an office in New York, but you may want to choose a national service so you have the flexibility to form LLCs in other states. Other than that, you should choose a service that offers:

• Compliance management, to send reminders of key deadlines 
• Document copying and digital storage so you can access documents online
• Availability during the required hours, with prompt customer service
• Service in all 50 states and US territories

Costs for a registered agent service range from $50 a year up to $300 or more. Several online firms, such as ZenBusiness and LegalZoom, provide quality services at reasonable rates.

Business Licenses and Permits Cost

Starting an LLC requires obtaining the required licenses and permits from local, state, and federal governments. Fees for these vary, but most costs are minimal.

Federal regulations, licenses, and permits associated with starting your business include doing business as, health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific permits. 

You may also need state-level and local county or city-based licenses. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties. If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

The most common permits and licenses include: 

1. Business operating licenses may be required by the city and the state to allow you to operate. 
2. Industry-specific licenses may be required, depending on your type of business. Businesses involved in construction, childcare, plumbing, electrical, food and liquor, insurance, finance, landscaping, and architecture all require licensing, for example. In some highly regulated industries, you may require licensing from a federal agency, such as the FDA or Department of Transportation.
3. Zoning permits are issued by municipalities to ensure you’re operating in an area in which you’re allowed to operate.  
4. Building permits verify that the building you’re operating in is up to code. Home occupation permits, which some areas require, allow you to operate a business from your home.
5. DBA permits allow you to do business under a name that is different from your legally registered business name.
6. Sales tax permits allow you to sell products and collect sales tax. 
7. An employer identification number (EIN) is required if you plan to have employees, no matter what your business entity type. 
8. Health licenses and permits are required for certain businesses based on industry, and you will be required to maintain health and safety standards. Environmental permits are also required for certain industries in some locations.
9. Fire permits certify that your business is up to fire safety codes. Depending on your location, this may be required for all businesses, while in other areas it’s required only if you work with flammable materials.
10. Sign permits may be required for your location or other signage if there are rules about sign size and location.

Again, check with local government offices in your area for specific requirements based on your location and industry, or visit MyCorporation’s Business License Compliance page.

Operating Agreement Cost

In New York, your LLC is required to have an operating agreement in place. Even though an operating agreement isn’t filed with the state of New York, the document persists to be an effective way to help avoid disputes and lawsuits that could threaten the stability of your business.

An LLC operating agreement is an important legal document that details who owns the business and provides essential information pertaining to member duties. An LLC operating agreement establishes the financial relationship between members and the basics of the working relationships between those members and the managers who oversee daily operations. 

Again, the operating agreement is not filed with the state. Instead, it remains a private internal company document. It’s advisable to hire an attorney to ensure your operating agreement is thorough and legally binding.

Creating an operating agreement is free if you just draw it up yourself. Alternatively, you can pay around $100 for guidance from an online business advisory like MyCorporation. 

This is an extremely important document, so it’s recommended that you use the services of a specialist or legal firm. If you choose to hire an attorney, the price will be around $500 for a single-member LLC and $2,500 for a multi-member LLC.  

LLC Formation Service Cost (Optional)

Forming an LLC in New York tends to involve a lot of red tape and paperwork, so for many entrepreneurs just starting out it’s a good idea to hire an experienced service provider. 

Some of the best services for forming an LLC are ZenBusiness and LegalZoom. LLC Formation service will take care of all the key steps, keeping you updated while allowing you to focus on launching and growing your business.

The cost of professional services depends on your requirements and LLC formation plan. Most LLC service providers offer different plans/packages and there are many LLC services that offer free LLC formation. Registered agent service (mentioned above) is very often included in these plans.

Ongoing New York LLC Costs

Every state has a different fee structure and timelines for LLC documents and licenses. It’s important to stay up-to-date or your business could face significant penalties. The fees and timelines for New York are detailed below. 

Annual Fees

In New York, you’ll need to file an LLC biennial statement to keep your LLC in good standing. In other states, this is called an annual report or a statement of information. The fee is $9, and you can file online using the state’s E-Statement Filing System. 

Franchise Tax Reports

A franchise tax is not a tax on a franchise business. It is a fee that the state imposes on registered business entities for the right to operate. New York charges an annual franchise tax on a sliding scale. See the table below to identify which bracket your business falls in. 

You can visit the state’s Department of Taxation and Finance LLC annual filing fee webpage for more information about the state’s franchise taxes. 

Business License Renewal Fees

Some business licenses and permits must be renewed periodically, which may have a small associated fee. In New York renewal fees vary. For example, a food service permit can cost $280 or even $400 to renew.

In contrast, New York liquor licenses are valid for three years. Licensed businesses will be sent a Renewal Advisory three months before the license expiration, specifying the total renewal fees.    

It’s best to create calendar reminders to monitor when expirations are coming up to ensure you have time to determine the necessary fees and apply for license renewals. This way, you can run your business without interruption.

In the table below, you’ll find the cost of forming an LLC in New York.

Conclusion

As you can see, starting an LLC in New York takes a lot of work. But it doesn’t have to be expensive if you’re willing to shoulder much of the bureaucratic burden. Still, it’s advisable to consult with an attorney or hire a business formation service for guidance. 

In most cases, the benefits of making your business an LLC far outweigh the costs and paperwork.