The economic prosperity offered by the State of New York has seen thousands of new businesses taking shape over years. New York has offered many businesses an array of state support, generous tax benefits, and also a market with excess income. One business structure which gained more popularity is Limited Liability Companies or LLCs. The flexibility and legal separation of assets have made this structure a prevalent choice for new startups.
What makes an LLC in New York so popular?
The legal stature of an LLC is recognized for its ability to form a ‘Corporate Veil’ that enables members of the business legal separation and protection against personal assets in the event of business instability. This flexible structure offers members advancement in business operations, and also better tax remunerations. With this, there is also the added exposure of greater investment opportunities, ease of formation, and a combination for secure startup, as friends and family members can form an LLC amongst themselves.
Why are LLCs so popular in New York?
Not only has the state rolled out great support plans, but it also makes it easier for owners to form their LLC. In time, the state has adopted its tax legislation, offering a zero net income tax, for both state and federal taxes, but rather a fee payable following their gross income. Additionally, business owners or members of an LLC will still be required to pay state income tax on personal profits received or earned from the company.
What impact has LLCs made on the New York State economy?
If we backtrack to a financial report issued by Empire State Development data in 2018, it shows that small businesses with 0-19 employees employ around 1.49 million state residents, businesses operating with 20-49 personnel employees are around 730,00 residents. These small businesses, in various counties, have opened 946,700 private-sector jobs, offering better monthly net income to a majority of people residing outside of New York City/Manhattan.
Some areas, such as Long Island, Suffolk, and Nassau counties have the second-highest employers outside of the state capital. Additionally, many of these firms have reported a profitable increase over the last few years. It’s important to remember that these businesses make a majority of the state economy, but not ignoring the strong and wealthy agricultural, banking, and raw material industries located within New York.
Create a name. Using a relevant and worthwhile LLC name can increase exposure, as well as, owners should ensure their chosen name adheres to some state regulations. These include the name not containing the words, academy, bank, university, and more, and should include the abbreviation LLC or L.L.C. You can read more on naming guidelines on New York’s Department of State’s Division of Corporations, State Records and Uniform Commercial Code website.
Appoint a Registered Agent. Having a registered agent will become your link between the business and state filing procedures. The selected registered agent can be the owner, a member, or perhaps an individual connected with business formation services.
File Articles of Organization. This can be done online, or you can post a hardcopy. There is a $200 filing fee payable to the Department of State and needs to be posted to the required government entities.
Publish Notice of Articles of Organization. This will need to be completed in 6 months and can be done over several weeks. Articles need to be published in a daily and weekly paper. A Certificate of Publication and Affidavit of Publication will be provided by the newspaper and should be filed.
Create an Operating Agreement. This document should outline assigned members, their roles and responsibilities and also how profits will be shared amongst them
Obtain an EIN. This is only obtainable via the IRS and can help you register for state and federal taxes, hire employees and open a business bank account.