LLCs in New York are not required to pay entity-level taxes, but they must submit an annual report and pay a $9 charge. The failure to submit this report by the due date, which is the anniversary of the LLC’s founding, may result in penalties.
The cost of establishing and maintaining an LLC can be more than for other business structures like a sole proprietorship or partnership, which is a drawback of creating an LLC. In New York, creating an LLC costs $200 plus a further $50 for expedited processing. Additionally, LLCs in New York must spend several hundred dollars to issue a notice of creation in two newspapers for a period of six weeks.
An LLC in New York must still file a tax return even if it makes no money. The LLC may, however, submit Form IT-204-LL, a “no tax due” return. Penalties and interest may apply if a tax return is not filed.
The decision between an LLC and a sole proprietorship depends on the needs of your particular firm. The simplest and least expensive business structure to start up and run is a sole proprietorship, but it does not offer the same level of liability protection as an LLC. LLCs provide asset protection for private property, but they can be more expensive and paper-intensive.
In New York, LLCs do pay taxes, but the taxes are transferred to the individual members. Compared to other business forms, LLCs might be more expensive to establish and manage even while they provide protection for personal assets. Before selecting a choice, it’s critical to consider the benefits and drawbacks of each business form.