New York LLC Notes: Publication Requirement, Biennial Statement, and Filing Fees

New York has a reputation for procedural quirks, and the LLC publication requirement is the most famous. This overview describes the general framework for educational purposes. Verify current rules with the New York Department of State and the Department of Taxation and Finance before you act.

The publication requirement

After forming an LLC in New York (or registering a foreign LLC), the company must publish a notice of formation (or a notice of authority for a foreign LLC) in two newspapers designated by the county clerk, one daily and one weekly, for six consecutive weeks, in the county where the LLC's office is located. Then the company files a certificate of publication with the Department of State. The cost of publishing depends on the county and can vary greatly, sometimes reaching amounts far greater than the state's filing fee, especially in New York City.

The deadline for completing publication is generally 120 days after formation. If the LLC does not complete publication within that time, the authority to carry on, conduct, or transact business in the state is suspended until the requirement is met. The LLC's existence continues, but the suspended authority can create problems for contracts and lawsuits. Publication is also required for foreign LLCs authorized to do business in New York. Because it is a formation step unique among states, budget time and money for it.

Biennial statement

New York LLCs file a biennial statement with the Department of State, generally every two years, with a modest filing fee. It updates the LLC's address for service of process and other information. Missing it can lead to loss of good standing over time. See annual reports and franchise taxes.

The LLC filing fee

For LLCs treated as partnerships or S-corporations for tax purposes, New York imposes an annual filing fee based on the entity's New York source gross income, in tiers, with a minimum. Disregarded single-member LLCs owned by an individual are typically treated differently, and filing requirements vary. This fee is separate from the biennial statement and is due with the entity's tax filings. Ask your preparer to confirm whether it applies to you.

S-corporations and state tax

New York recognizes federal S elections but requires a separate state S election for state purposes, with its own form and deadlines. Some corporations that federal law treats as S-corps may be taxed differently at the state level if the state election is missing. Check whether your entity has made the state election, which is often overlooked. See S-corp election guide.

New York City taxes

New York City imposes its own taxes on businesses, including the general corporation tax or business corporation tax for corporations, and the unincorporated business tax (UBT) for partnerships and sole proprietors operating in the city, subject to exemptions and credits. City taxes add a separate layer of compliance and can materially change the economics of entity choice. If your business operates in the city, consult a professional who works with city returns regularly.

Pass-through entity tax

New York offers an elective pass-through entity tax, designed to allow eligible entities to pay state income tax at the entity level, with a corresponding credit to owners. Elections are made annually with deadlines, and payments may be required in advance of the return due date. Because rules and deadlines matter, consult current guidance. See pass-through entity tax.

Sales tax and employment taxes

New York has a sales tax that applies to many goods and to specified services, and registered sellers must collect and remit it. Registration and certificate of authority requirements should be reviewed before you begin selling. Employers must register for withholding and unemployment insurance. New York also has additional payroll-related taxes in some regions, so ask your payroll provider what applies at your address.

Professional entities

Certain licensed professionals in New York must practice through professional service LLCs or professional corporations, and non-professionals may be restricted from owning them. If you are a professional, check the requirements with your licensing agency and an attorney.

Practical steps for a new NY LLC

1. File the Articles of Organization with the Department of State.
2. Choose a county for publication, get quotes from designated publishers, and complete publication within the deadline.
3. File the certificate of publication.
4. Prepare an operating agreement. New York requires LLCs to adopt one within 90 days of filing the articles. See operating agreement guide.
5. Obtain an EIN. See getting an EIN.
6. Register for state and city tax accounts as needed.
7. Calendar biennial statements and annual tax filings.

Costs to budget

Plan for the filing fee, the publication cost, the certificate of publication fee, biennial statement fees, and the annual LLC fee where applicable, plus any state and city income or franchise tax. Those can exceed the costs in states with more streamlined requirements. That is not a reason to avoid forming in New York if you operate there, but it is a reason to plan.

Owners outside New York

If you are a New Yorker who formed an LLC in another state hoping to skip the requirements, you generally still need to register the LLC in New York and meet its publication requirement for foreign LLCs. See forming in Delaware or your home state and foreign qualification basics.

Getting help

For owners who operate in New York City or across state lines, AE Tax Advisors can help evaluate state and city tax implications, and a discovery call is a good first step.