If you are thinking of starting a business, the first thing you’d like to know is how fast can you start to operate. Corollary to this question is how long does it take to get an LLC.
How long does it take to get an LLC in New York
In New York, there are four ways to file for an LLC: online, by person, by fax, or by mail. With the new COVID protocols, however, most LLCs are filed online or by mail. When filing online, approval is immediate, for as long as the documents submitted are correct and they are filed during business hours. Approval from filing by mail can take 4 months now (with COVID measures in place) from the regular three to five weeks, but you can expedite your LLC with the 24-hour option for an extra $25.
Although approval for LLCs filed online is immediate, the preparation required to file your LLC can often take longer, especially when members are more than one person.
Preparation required to file your LLC in New York
First, you need to choose your name. Your business name can be different from your trade name. For example, you are a franchise owner of McDonald’s in New York. Your business name can be ABC LLC but your trade name (which is your assumed name or the name you are doing business as) is the name of the brand, McDonald’s. Once you confirm that your name is available, you can apply to reserve your name.
There are restrictions in creating names. For example, you cannot use the word “bank” in your LLC name, unless you get the required consent from financial services. You cannot use the word “college” in your LLC name unless you have consent from the Board of Regents and the Commissioner of Education. The list of name restrictions can be found here: https://dos.ny.gov/system/files/documents/2018/10/restrictedwordsphrases.pdf
Second, once you have confirmed your LLC name’s availability and have reserved such name, you can now draft the LLC’s articles of organization. The articles of organization must state the name, the county location in New York where the LLC’s office is located, the designation of the Secretary of State as agent for service of process, the organizer’s signature, and the name of the filer. The articles of organization are filed via mail, fax, in person, or online.
The county and your business address are important because your application for LLC has to be published in two newspapers (one daily newspaper and one weekly newspaper) for six consecutive weeks. The newspapers must be designated by the county clerk of the county in which the LLC office is located. Publication can be expensive. Publishing in a newspaper in NYC is more expensive than publishing in a newspaper in Staten Island. For this reason, some people get the services of a registered agent, whose address they use for the LLC office, to save on publication costs, among others.
You need to file the Certificate of Publication you received from the newspaper within 120 days from your LLC approval from the Department of State. Failure to file this certificate of publication will result to your LLC’s suspension of authority to conduct business.
Third, you need to finalize a LLC operating agreement with the members (the LLC owners). The LLC operating agreement will outline the responsibilities of the members, how decisions are made, whether the LLC is managed by the members or by a manager, how profits and dividends will be distributed, and how new members will be admitted or how membership can be transferred. This LLC operating agreement is an internal agreement that does not need to be filed with the Department of State.
Fourth, once you have published your LLC formation and submitted to the Department of State the certificate of publication, you can now get an employer identification number (EIN) from the Internal Revenue Service. This EIN will be used to track your business activity. It is needed to open a bank account, to file federal and state taxes, and to hire employees.
Fifth, for some types of businesses, you might need additional business licenses or permits. For example, if you plan to sell goods in New York, you need a seller’s permit from the Department of Taxation and Finance. New York has long list of businesses that require permits and licenses. You can check whether your business requires it here: https://www1.nyc.gov/nycbusiness/index
Only when you have all these permits and licenses can you begin operating as a business in New York. So even if the answer to the question, how long does it take to get a LLC, is immediately, the answer to how fast you can begin operating your business is not immediately.
An LLC or a limited liability company is a form of business organization, with the advantage of being a corporation that provides limited liability, protecting the owner’s personal assets from business claims, while at the same time, offering the LLC owner (called the “members”) more flexibility in terms of management and payment of taxes.
An LLC can be managed by the members or a manager. The LLC can also choose whether it wishes its income to be taxed as a corporation, a partnership, or a sole proprietorship. If the LLC elects to be treated as a corporation, it is taxed on its corporate income, and any distribution to the member will be separately taxed as the member’s income. On the other hand, if the LLC elects to be treated as a partnership, the LLC simply reports its income, but the tax on income is attributed to and paid by the members annually based on their percentage ownership.
LLCs with only one member can elect to be treated as a sole proprietorship where the LLC’s income is reported and paid on the lone member’s personal income tax return. With these features, the LLC provides a new business owner with flexibility.
Although you can file your LLC alone by yourself, you can save time, effort, and money, by getting a lawyer to file these documents for you so you can get your business up and running in no time. Should you need assistance, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York, NY, Brooklyn, NY and Queens, NY. You can call us at 718-509-9774 or send us an email at firstname.lastname@example.org.