Forming a Limited Liability Company
A limited liability company (LLC) is similar to a corporation because it shields the members from the liabilities of the business like a corporation shields the shareholders from the liability of the corporation. An LLC is similar to a partnership because the agreement between the members, called an operating agreement, can be drafted to specifically fit the needs of the individual company and the members.
Typically, anyone can be a member of an LLC. This includes individuals, partnerships, corporations, other LLCs and other entities.
An LLC is formed by filing Articles of Organization with the New York State Department of State. The articles must state the following:
Name - The name of the LLC must be on the Articles of Organization. It must be entered in multiple places on the Articles of Organization and it must be the same on all places on the Articles of Organization.
County - you must enter the county, in New York, where the LLC will be located.
Service of process address - The Articles must designate where the New York State Secretary of State will mail process if served. This means that the Secretary of State can be served on the LLC’s behalf if the LLC is sued and jurisdiction is obtained over the LLC. The Secretary of State will mail a copy of the papers to the address you designate here.
Signature - The organizer of the LLC must sign the Articles of Organization and print their name.
Filer - The filer of the LLC must provide their name and address
There is a filing fee of $200 to file the Articles of Organization.
A copy of draft Articles of Organization are provided here for your convenience. Please note, this is only a reference copy, please consult with a lawyer regarding the importance of these documents.
An LLC must draft an operating agreement to be valid. This document can be drafted before or after the Articles of Organization are filed, provided the document is executed within 90 days of the Articles of Organization being filed.
The Operating Agreement spells out the rights and responsibilities of the members of the LLC and it dictates how the LLC will be managed. There is no requirement that the operating agreement be filed with New York State.
A newly formed LLC must also publish a notice of formation in two newspapers authorized by the County Clerk for the county in which the LLC has been formed. The notices must be published for six consecutive weeks. After the publication has been completed the newspapers should provide you with affidavits of publication. Upon receiving those, they must be filed with the New York State Department of State along with a certificate of publication; the filing fee is $50.
These are the basic requirements for creating an LLC in New York. Each case is unique and you should consult with an attorney familiar with LLC law prior to executing or filing any documents to form your own LLC.