Running a business as a sole proprietorship can be straightforward, but it may not offer the protections and benefits you need as you grow. Transitioning to a Limited Liability Company (LLC) can provide personal liability protection and a more flexible management structure.
Choose a name for your LLC
Your LLC’s name must be unique and distinguishable from other businesses registered in New York. Check name availability through the New York Department of State’s website. Ensure the name includes “LLC” or “Limited Liability Company” and doesn’t include restricted words without proper approval.
File Articles of Organization
To officially form your LLC, you need to file Articles of Organization with the New York Department of State. The document includes basic details about your business, such as the LLC’s name, address, and the name and address of the registered agent. You can file online or by mail.
Publish notice of formation
New York requires new LLCs to publish a notice of formation in two newspapers within 120 days of filing the Articles of Organization. The county clerk’s office will designate the newspapers. After publication, you must submit a Certificate of Publication along with affidavits of publication from the newspapers to the Department of State.
Obtain an EIN and notify tax authorities
An Employer Identification Number (EIN) from the IRS is necessary for tax purposes and to open a business bank account. You can apply for an EIN online through the IRS website.
Inform the IRS, New York State Department of Taxation and Finance, and any local tax authorities of your new LLC status. Additionally, update your business information with banks and creditors.
Moving forward with confidence
Switching from a sole proprietorship to an LLC in New York involves several steps, but it’s manageable with careful planning. It’s a change that can provide your business with valuable protections and benefits.
