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Limited Liability Companies (LLCs) and Limited Liability Partnerships (LLPs)

A limited liability company (LLC) is an unincorporated organization, with one or more members, each having limited liability for the contractual obligations and other liabilities of the company, other than a partnership or trust, that is formed for any lawful business purpose under the Limited Liability Company Law of New York State or under the laws of any other jurisdiction.

Note: The term LLC includes limited liability investment companies (LLICs) that are established and regulated under Article 12 of the New York State Banking Law and limited liability trust companies (LLTCs) that are established and regulated under section 102-a of Article 3 of the New York State Banking Law.

A limited liability partnership (LLP) is a partnership whose partners are authorized to provide professional services and that has registered as a limited liability partnership under Article 8-B of the Partnership Law of New York State or under the laws of another jurisdiction.

Both domestic LLCs and LLPs are required to register with the New York State Department of State. In addition, foreign LLCs and LLPs that wish to carry on or conduct business or other activities in New York State must also register with the Department of State.  For information on registration, visit the Department of State.

Tax treatment

The New York personal income tax and the corporate franchise tax conform to the federal income tax classification of LLCs and LLPs.  

  • An LLC or LLP treated as a partnership for federal income tax purposes is treated as a partnership for New York tax purposes.
  • An LLC or LLP treated as a corporation, including an S corporation, for federal income tax purposes is treated as a corporation for New York tax purposes or as a New York S corporation if the New York S election is made (or if it is a mandated New York S corporation).
  • A single-member LLC (SMLLC) treated as a disregarded entity for federal income tax purposes is treated as a disregarded entity for New York tax purposes.  If the single member is:
    • an individual, the LLC is treated as a sole proprietorship for New York tax purposes. 
    • a corporation, including an S corporation, the LLC is considered a division of the corporation for New York tax purposes.
    • a partnership, the LLC is considered a division of the partnership for New York tax purposes. 

For information regarding the tax treatment of an LLC or LLP for purposes of the New York City taxes, visit the New York City Department of Finance Business webpage.

Tax responsibilities

  • An LLC treated as a sole proprietorship must report its business income and expenses on the member’s New York State personal income tax return. 
  • An LLC or LLP treated as a partnership may be required to file a New York State partnership return.
  • An LLC or LLP treated as a corporation, including an S corporation, may be required to file a New York State corporation franchise tax return. 
  • An LLC or LLP may be required to pay a filing fee and/or estimated income tax on behalf of certain partners or members.

Converting or changing an existing business entity

Businesses that convert to an LLC or LLP must take certain steps to ensure they remain compliant with New York State Law.

  • Registrations, licenses and permits
  • Bonds
    • If an existing business filed a bond or other security with the Tax Department, a rider or other documentation demonstrating the continued application of the bond must be executed and submitted as an addendum to the bond or other security. 
  • Asset transfers
    • If an existing business is transferring business assets to the new LLC or LLP, see buying a business.
    • If an existing business is transferring real property to the new LLC or LLP, see real estate transfer tax. 
  • Required notification
    • If a business receives Form TR-570, LLC/LLP Request for Information, they must complete and return it to the Tax Department to update business account information.

For more information

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