New York regulates securities through the Martin Act, General Business Law Article 23-A, enforced by the Attorney General rather than a securities commission. The state never adopted the Uniform Securities Act, so its rules read differently from other states. One example sets the tone: GBL 359-e(1)(a) defines a dealer to include an issuer selling its own securities, so your fund is a dealer in New York's eyes, and the Form D you already file with the SEC is what satisfies that dealer registration statement.
The costs are real but knowable. Each LLC costs $200 to file and must then publish notice of its formation in two county newspapers for six successive weeks. The state notice for a Rule 506(b) offering costs $300 or $1,200 depending on offering size. On the adviser side, New York never adopted the model private fund adviser exemption, yet most new fund managers fall outside the definition of investment adviser entirely through the statute's exclusion for anyone with fewer than six New York clients.
This guide maps each requirement to its statute or rule, uses the fee amounts from the official schedules, and flags the questions that genuinely belong with counsel. Federal securities law sets the frame; New York adds a notice filing, a publication run, and two tax fees.
Five steps to launch in New York
Generate Documents
FreeHedgia generates your fund documents at no charge, whether or not you launch on the platform. The documents are drafted for a Rule 506(b) offering by a Section 3(c)(1) fund.
Create the Two LLCs
Hedgia forms the management company and the fund as New York LLCs with the Department of State and obtains an EIN for each. New York then requires each LLC to publish notice of its formation.
Create Accounts and File Notices
Banking opens through Axos Bank inside the launch flow. At your direction, Hedgia prepares and submits the SEC Form D and the New York notice. Because GBL 359-e(1)(a) treats an issuer selling its own securities as a dealer, the Form D filed through EFD is what satisfies New York's dealer registration statement.
Invite Investors
Investors onboard through the platform: KYC, subscription documents, and funding. The investor limits come from federal law; New York cannot add merit review to a Rule 506 offering.
Start Your Fund
Once funded, the platform runs the operational layer: NAV, fee calculations, investor reporting, and K-1 preparation.
* $89/month includes 3 manager seats. Additional seats $30/month each. Plus 0.2% of AUM above $1 million, capped.
New York requirements at a glance
The law behind each requirement
Rule 506(b): the federal exemption most private funds use
Rule 506(b) is an exemption from Securities Act registration for private offerings. It is the reason a fund can raise money without an IPO style registration statement, and it is what makes the state analysis a notice question rather than an approval question.
- •Unlimited accredited investors, plus up to 35 non-accredited purchasers per offering
- •No general solicitation or advertising
- •Securities sold under Rule 506 are covered securities; states cannot impose registration or merit review, only a notice, a fee, and consent to service of process
- •SEC Form D is due within 15 days of first sale
New York's notice: a dealer filing under the Martin Act
New York defines a dealer to include an issuer selling its own securities, so the state treats the Form D notice as satisfying the issuer's dealer registration statement. There is no statutory late fee, but selling without the filing is unregistered dealer activity enforceable by the Attorney General, and per the AG's guidance a Form D claiming an exemption the offering did not actually qualify for is void ab initio.
- •Due within 15 days of the first sale of securities within or from New York State
- •$300 if the total offering is $500,000 or less; $1,200 if it exceeds $500,000. Valid four years; renewal is Form D plus the same fee. Amendments cost $30
- •Filed through NASAA's EFD, mandatory for Rule 506 issuers since February 1, 2021; no new paper Form 99 filings are accepted
- •Filing through EFD irrevocably appoints the Secretary of State as agent for service of process, so no separate Form U-2 is needed
Adviser registration: no private fund exemption, but a real exclusion
Anyone who, for compensation, advises the public on securities within or from New York must register with the Department of Law before doing advisory business. New York never adopted the NASAA model private fund adviser exemption. The working shelter is narrower and older: the statute excludes small client counts from the definition of investment adviser altogether.
- •Excluded entirely: a person who sold, during the preceding twelve month period, investment advisory services to fewer than six persons residing in New York, not counting financial institutions and institutional buyers
- •A limited partnership or LLC counts as one client of its general partner or managing member, and fund investors are not counted merely because you offer them interests or report to them
- •If registration is required: Form ADV through IARD, $200 initial and annual renewal, plus Form U4 registration and the Series 65, or SIE plus Series 7 plus Series 66, for principals and adviser representatives unless waived
- •Whether a given fund qualifies as an institutional buyer under 13 NYCRR 11.12(e), which would remove it from the count entirely, is fact specific; treat it as a counsel question
The federal layer: ERA status and the SEC quirk unique to New York
Federal and state adviser regulation are independent layers. An adviser solely to private funds with under $150 million in US private fund assets can be an SEC exempt reporting adviser under Advisers Act Section 203(m). That federal status does not excuse New York registration, and New York has no ERA category of its own; the state analysis runs separately through the exclusion above.
- •Advisers with under $100 million in regulatory AUM are generally prohibited from SEC registration and fall to the states (Advisers Act Section 203A)
- •The SEC staff FAQ lists New York as the only state where a mid-sized adviser, $25 million to $100 million in AUM, is not subject to examination, so a mid-sized adviser with its principal office in New York registers with the SEC instead of the state
- •Exempt reporting advisers file a truncated Form ADV with the SEC
- •Federally covered advisers with more than 5 New York clients notice file Form ADV Parts 1A and 2A through IARD, with the same $200 fee
Section 3(c)(1): the 100 investor exclusion
A private fund stays outside the Investment Company Act by fitting Section 3(c)(1), which is an exclusion from the definition of investment company, not an exemption. Lose it and the fund faces the full registration regime built for mutual funds.
- •No more than 100 beneficial owners of the fund's outstanding securities
- •No public offering of the fund's securities
- •The exclusion is federal; it does not replace New York's notice filing or the adviser analysis
- •It echoes in New York's rules too: a 3(c)(1) fund is not an investment company for the institutional buyer definition in 13 NYCRR 11.12(e)(4)
Costs most states do not have
The LLC publication requirement
Within 120 days after its articles take effect, each LLC must publish a notice once a week for six successive weeks in two newspapers of its county, one daily and one weekly, designated by the county clerk, then file a $50 Certificate of Publication with the Department of State. Failure suspends the LLC's authority to carry on business in New York until compliant proof is filed. Only the $50 certificate fee is set by the state; newspaper rates are market prices, commonly estimated from about $300 upstate to $1,600 or more in New York City counties. Confirm current rates with the papers your county clerk designates.
The annual IT-204-LL filing fee
An LLC treated as a partnership for federal tax purposes with New York source gross income owes an annual state filing fee, due the 15th day of the third month after year end. Brackets run from $25 for gross income of $100,000 or less, through $50, $175, $500, $1,500, and $3,000, to $4,500 above $25,000,000. A single member disregarded LLC with New York source income pays a flat $25. Both the fund and the management company can owe this every year (NY Tax Law 658(c)(3)).
New York City's Unincorporated Business Tax
If the management company operates in the five boroughs, its net fee income is generally subject to the 4% UBT. The fund itself generally is not: an unincorporated entity buying and selling securities for its own account is exempt (NYC Admin Code 11-502(c)). A business tax credit zeroes out the UBT when the tax before credit is $3,400 or less, about $85,000 of taxable income, and phases out to nothing at $5,400 of tax, or $135,000 of income. Managers outside New York City owe no UBT.
Heavy at the start, light after launch
The New York path in one view: file two sets of articles at $200 each, run the six week publication in each LLC's county and file the $50 certificates, then make one securities filing, the Form D through EFD, within 15 days of first sale. That notice costs $300 or $1,200 by offering size and holds for four years. There is no separate consent to service filing; completing the EFD submission itself appoints the Secretary of State as your agent for service.
The adviser layer usually resolves cleanly. New York has no private fund adviser exemption, but most new managers do not need one: the fund counts as a single client, and a person who sold advisory services to fewer than six New York residents in the preceding twelve months is not an investment adviser under the statute at all. Two questions still belong with counsel: how a fund formed outside New York counts toward the residency test, and whether your fund qualifies as an institutional buyer, which would remove it from the count.
The heavy costs come first. Publication and the notice fee sit at the front of the timeline, while the recurring state burden after launch is a $9 biennial statement, the IT-204-LL fee, and the UBT only if you manage from the five boroughs above the credit thresholds. Hedgia forms both LLCs, obtains the EINs, prepares and submits the Form D and the EFD notice at your direction, and opens banking through Axos Bank, with $0 upfront and fund documents that are free to generate either way.
Office of the New York State Attorney General, Investor Protection Bureau