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What does a New York LLC cost? This is a common question for new business owners in New York who are establishing a limited liability company. So let’s explore this question and review some general information about LLCs and how they are formed.
How Much Does It Cost to Form an LLC in New York?
An LLC, or limited liability company, is a type of business structure that many owners choose when starting a business due to the many advantages LLCs provide owners, such as:
- Flexible management structures
- Owner liability protection
- Various tax benefits
LLCs can have a single owner, or they can have multiple owners who are called members. No maximum number of members can own an LLC, and these members can be individuals, corporations, other LLCs, and foreign entities.
When establishing a new LLC in New York, the owner or members will incur several fees. Some fees are mandatory, while others are optional and vary due to business choices.
At a minimum, business owners starting an LLC in New York will be responsible for the following fees:
- Articles of Organization. New York State charges LLC owners $200 to file Articles of Organization with the Department of State.
- Certificate of Publication. Under New York laws, new LLCs must publish a copy of their Articles of Organization in two newspapers for six consecutive weeks. The county clerk where the business is located designates specific papers from which a business owner can choose. Newspaper publishing fees will vary, and then LLC owners will need to pay $50 to file the Certificate of Publication and an affidavit of publication proving that the business satisfied the publication requirement.
Suppose an LLC chooses to hire an attorney to assist with forming an LLC. In that case, it will also incur legal fees that will vary based on how the lawyer charges their clients and how much work the lawyer performs.
Based on ContractsCounsel’s marketplace data, the average cost to start an LLC in New York is $1,125.00.
New York LLC Ongoing Costs
Once an LLC is formed in New York, there will be periodic fees to keep the business legally operating.
LLC owners in New York can expect to pay the following ongoing LLC costs:
- Annual Filing Fee. Any New York LLC treated as a partnership or disregarded entity for federal income tax purposes with any income, gain, loss, or deductions derived from New York must pay an annual filing fee. However, suppose an LLC elects to be treated as a corporation for federal income tax purposes. In that case, it does not have to pay an annual filing fee. The fee ranges from $25 to $4,500, depending on the LLC’s income.
- Biennial Statement. New York LLCs must file a biennial statement every other year. The filing fee is $9.
- Business license renewal fees. Some businesses may require state or county permits. However, most permits need to be renewed annually or every few years.
New York LLC Drafting Projects
Operating Agreement Drafting
New York is one of the few states that requires LLCs to adopt a written operating agreement. The operating agreement must be drafted within 90 days of filing the Articles of Organization.
Operating agreements are legally binding contracts that outline how a company will operate and govern. The operating agreement establishes:
- Rights of LLC members
- Duties of LLC members
- Liabilities of LLC members
- Obligations of the LLC members
Operating agreements are considered internal documents and are not required to be filed with the state; however, they are still vital legal documents that must be drafted correctly.
Many businesses hire an attorney to draft the operating agreement to ensure it sufficiently protects all members, the LLC, and adheres to New York state laws.
There will not be a filing fee associated with an operating agreement. Still, LLCs that hire attorneys to draft the operating agreement will incur legal fees. The cost of an operating agreement will vary depending on the document length and complexity.
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Articles of Organization Drafting
To legally establish an LLC in New York, the business must file Articles of Organization with the New York Department of State. Articles of Organization should include the following basic information:
- Name of the LLC
- New York county, where the LLC is located
- Registered agent
- Owner’s name
- Filer’s information
While the basic information is sufficient to establish an LLC, owners should understand that a business’s Articles of Organization are legally binding, and the information included or omitted will affect the LLC.
For example, in New York, LLCs are automatically designated as member-managed. If you want your LLC to be manager-managed, this needs to be stated in the Articles of Organization.
Another example is the registered agent. Unlike other states that allow LLC owners to choose their registered agent, in New York, the New York Secretary of State is every LLC’s registered agent by default. If you want a appoint a different registered agent, it must be in the Articles of Organization.
An experienced attorney will know how to draft and file Articles of Organization to give you full control of your LLC and how you want the company to function.
How Do New York Lawyers Charge for LLC Projects?
Hourly Rates for New York LLC Projects
New York business attorneys commonly use hourly rate fee structures to charge clients. Under this fee agreement, the lawyer will keep track of all the time spent forming their client’s LLC, whether they are drafting agreements or filing documents with the state.
Once the business is established or the specific task or project has been completed, the attorney will bill the client for hours spent working on their LLC project.
ContractsCounsel’s marketplace data shows that the average hourly rate for a business lawyer in New York ranges from $200 - $350 per hour.
Flat Fee Rates for New York LLC Projects
Sometimes an LLC owner only wants to hire a lawyer for a specific project like drafting Articles of Organization. In this situation, a lawyer may quote the client a flat fee rate rather than charging hourly.
Under a flat fee rate agreement, the lawyer will determine a fair total cost of services based on the requested task or project. Flat rate fees are usually paid upfront before the lawyer begins work.
Some lawyers will allow clients to pay installments throughout the project, but that needs to be discussed and agreed upon before the client hires the lawyer for the project.
ContractsCounsel’s marketplace data shows that the average flat fee rate for an LLC project in New York is $1,125.00.
Get Help with Forming an LLC in New York
Do you need help with a New York LLC project? If so, post a project in ContractsCounsel’s marketplace to receive flat fee bids from business lawyers who are licensed to practice law in New York. All lawyers on the ContractsCounsel’s platform are vetted by our team to make sure you are provided with top tier service.
ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
