Newbie’s Guide for LLC/Corporation in New York State
What’s an LLC/INC?
A business entity that is formed or incorporated. Let’s expand on this a bit.. Your business can be characterized as an organization. This organization can be constituted as a separate entity, separate and distinct from you, its creator or owner. Is this a living thing? No, it’s not person, not an animal, not biologically living. However, it was conceived as a way for a business to exist, grow, shrink, affect, sell, pay tax, etc…all while being, at least philosophically, detached from it’s human controllers.
Simply stated, it creates some separation between you and the business. In doing so, it can protect your personal assets or at least limit liability (the amount you are responsible) in the event of legal suits.
Where does this take place?
Filings, Certificates, or Documents are submitted to the Secretary of State. That means the office for the State of New York accepts your information, cashes your check (payment), and in return grants you permission to make your business an entity which operate in NYS. They provide you with a receipt or confirmation of such action. Always keep those documents; scan them and keep the paper copy.
How to Incorporate in NYS?
In New York State, you must file a document, either Article of Incorporation/of Organization with the Secretary of State informing him/her of your wish, intent to do create a business entity. The document is submitted with required information and a filing fee. The Sec. of State
When? Better sooner than later. If something were to go wrong with the business, like a liability issue (a lawsuit) you may no protection against your personal assets forfeiture in you lose or are deemed lly responsible for the action.
Summary: You can incorporate a business in NYS without the assistance of a professional. We’re not say yes or no to it, simply, the state receives your information one way or another. They don’t care where it comes from.
First, go to the state website for corporate dealings here. The website provides instructions but contains a large number of additional forms and certificate that are not necessary to get started. Not to say they are not important they just aren’t essential.
Pros: Inexpensive; You’ll have the satisfaction of doing it yourself.
Cons: Potential mistakes which can be costly to rectify, legal issues if filings, paperwork, documents are not correct or do not reflect the expectations.
Summary: If you are bootstrapping this business incorporation and are choosing an LLC. There’s an extra step you can take to save several hundred or maybe $1000 or so.
Not immediately realized as a cost to form an LLC is the requirement to publish notice. Whichever NYS county you claim as the address of your business, you must publish a notice of LLC Formation in the local papers. NYS has a list of approved publishers you can choose from.
The notice is published in the paper for a few weeks, twice! That means for have to pay the paper twice for this service. The issue becomes if you are in the NYC Metro, LI, Westchester, Rochester, Buffalo, and the other urban areas, the publishers charge several $100s, even $1000s in the case of NYC. If you incorporate in Albany there are several very inexpensive publishers. They may be even more inexpensive publishers in the middle of the state. We’re covering the Albany method.
The steps are as follows:
Summary: If you want it done correctly from the beginning it’s best to use these services. They punched out $100s of these a week..that’s why they’re relatively inexpensive.Usually, between $100-$200 for complete the filing process.
Pros: Professional take care of everything, save time
Cons: costs money, be weary of upsells. You want to include acquiring the EIN number it’s another ~$35
|Business Creation Fee||$200||$125||Secretary of State|
|Tax on shares (200)||NA||$10||Secretary of State|
|EIN (tax ID)||$0||$0||IRS|
|Public Notice||$400-$2000||NA||County Newspaper|
What’s a Registered agent?
A person or legal entity that’s designated to receive on behalf of the business. Essentially the State wants a person or entity (and their address) to communicate with to conduct official business: Such as in the case of sending documents, legal proceeding, lawsuits. Registered means official, on-the-record,…Agent is someone one or entity that represents you and may act at the primary point of contact for the business.
Process of Service?
Corporation Terms to Know
LLC TERM TO KNOW