Prepared by U.S. Legal Forms, Inc.
Copyright - U.S. Legal Forms, Inc.
LIMITED LIABILITY COMPANYFORMATION PACKAGE
STATE OF NEW YORK
Control Number: NY-00LLC
The contents of this package are as follows: 1. Statutory Reference
2. Introduction & Selections from Statutes
3. Forms List
4. Notes on Downloading the Forms
5. Notes on Completing the Forms
6. Instructions and Steps
7. Accessories
8. Sample Ledger and Certificate
9. Disclaimer
LIMITED LIABILITY COMPANYFORMATION PACKAGE – NEW YORK Electronic Version
Statutory Reference
New York Consolidated Laws: Chapter 34, Article II
http://assembly.state.ny.us/leg/?cl=57
Introduction & Selections from Statutes
Created by state statutes to encourage business activity, a limited liabil ity company (LLC) is a
“hybrid” type of business organization, with characteristics of both a partnership and a
corporation and many of the advantages of both. Like a corporation, the limited liabil ity
company is a legal entity separate from its owners who are known as “members.” Barri ng some
other arrangement, members normally vote on any proposed action for the LLC, with the numbe r
of votes per member typically corresponding to his or her percentage of ownership interest in t he
business. Some of the advantageous benefits of an LLC include flexible ownership and
management, protection from liability for owners, and tax advantages.
FLEXIBILITY
A limited liability company generally has fewer legal formalities to observe than a corporation,
and is simpler to create and maintain. The ownership and management of an LLC is more
flexible than a corporation and very closely resembles that of a partnership. Keeping of corpora te
minutes is not required. Management and control of an LLC is vested with its me mbers unless
stated otherwise in the LLC’s Articles of Organization (called a Certificate of Formation in some
states). The owners of an LLC are called “members” and differ from the shareholders of a
corporation because members are allowed to participate in the management of a n LLC without
being appointed to a managerial position such as a director or officer of a corporation.
IRS rules now allow an LLC to choose between being taxed as a partnership or as a corporat ion
(most choose partnership, but see below). If an LLC has more than one member, the relationshi p
between those members is governed by a written operating agreement. Although an LLC used to
be required to be comprised of at least two LLC members, today most states and t he IRS
recognize the single-member LLC as a legitimate business structure.
LIMITED LIABILITY
In most cases, only the LLC is responsible for the company’s debts and the members are
protected from being individually liable. As a result, the member’s assets are typically not at risk
if the LLC is sued or cannot pay its debts. To maintain this limited liabi lity protection for the
members the LLC must follow requirements such as holding member meetings and docume nting
decisions through resolutions. However, there are some exceptions where individual members
may be held liable if he or she:
* Personally and directly injures someone
* Personally guarantees a bank loan or a business debt on which the LLC defaults
* Fails to deposit taxes withheld from employees’ wages
* Intentionally does something fraudulent, illegal, or clearly wrong that causes harm to the
company or to someone else, or
* Treats the LLC as an extension of her personal affairs, rather than as a separate legal entity.
TAXATION
Many tax benefits are available to LLCs and members including “pass through” tax t reatment of
profits and losses, easy allocation of profits and losses to different members, and elimi nation of
payroll taxes for members’ cash withdrawals. The earnings of an LLC are not subject to
corporate taxes; instead, the profits flow through to the owners in proportion to their ownership.
However, LLC owners can instead elect to have their LLC taxed like a corporation. This may
reduce taxes for LLC owners who will regularly need to retain a significant amount of profits in
the company.
DISADVANTAGES
An LLC does not allow ownership to be transferred through sale of shares in the same way as
corporate stock ownership allows. In most jurisdictions, ownership interest may only be
transferred or created with the consent of a majority of the other members, unless the articles of
organization provide for a greater or lesser level of consent.
An LLC may abruptly cease to exist. Unless otherwise provided in the articles of organi zation or
a written operating agreement (which may for example allow a majority of members to vote to
continue the LLC), an LLC is dissolved at the death, withdrawal, resignation, expul sion, or
bankruptcy of any member. The LLC operating agreement can prevent this kind of abrupt e nding
to your business by including certain provisions setting up guidelines for what will happen when
one member retires, dies, becomes disabled or leaves the LLC.
FORMATION
Not all businesses can operate as LLCs. Businesses in the banking, trust and insurance industry,
for example, are typically prohibited from forming LLCs. In addition, some states prohibit
professionals such as architects, accountants, doctors and other licensed healthcare workers from
forming LLCs, requiring a Professional Limited Liability Company (PLLC) or other entity.
State laws governing LLCs vary from state to state. However, if the LLC will have significant
business or member contacts (a.k.a. "presence") within a state, it should be formed in that st ate.
Otherwise, it may be subject to fees and/or taxes for doing business in an outside stat e. If an LLC
is required to qualify to do business in an outside state, it may have to pay filing fees and
franchise taxes as a foreign LLC to the outside state.
ARTICLES OF ORGANIZATION
The existence of an LLC begins when a document typically known as the “Article s of
Organization” are filed with the Secretary of State’s Business/Corporate Division. The Art icles
of Organization is the primary document constituting the legal identity of the LLC. If there are
any conflicting provisions in other LLC forms or documents (the operating agreement, member
agreements, or resolutions), the articles of organization override such provisions.
Requirements vary by state, but most states require the following minimum information:
* The name of the LLC. The name you select must not be the same as or decept ively similar to
an existing business name in your state. Most states require that the limited lia bility company
name be followed by the words “Limited Liability Company” or by the abbreviation “LLC.”
* The mailing address of the proposed entity.
* The name and address of a registered agent in the state of filing.
* The name and address of the LLC’s organizer.
* The LLC’s stated period of duration or date of termination (indefinite/perpetual durat ion is
normally allowed.
* Some states may require that your articles of organization list the name and addre ss of each
LLC member.
* The signature of the Organizer (person filing the Articles of Organization).
* Whether the LLC will be managed by one manager, more than one manager, or the members.
REGISTERED AGENT
Most states require that an LLC have a Registered Agent at a Registered Offi ce within the state
of formation. This Registered Office may be at an address that is different from the L LC’s
business address, but may not normally be a post office box.
The main purpose of the Registered Office/Agent requirement is to provide a public record of a
person who will accept service of process on behalf of the LLC if claims are brought aga inst it.
Because the Articles of Organization are a public record, potential claimants can usually contact
the Secretary of State’s office to obtain LLC’s registered agent information in orde r to serve your
LLC with a subpoena or summons. The agent may also be used to accept official doc uments,
such as tax notices.
OPERATING AGREEMENT
LLC members should enter into an Operating Agreement of some type (a detailed sample is
provided in this package). This Operating Agreement may be established either before or aft er
the filing of the Articles of Organization and may be either oral or in writing i n many states.
Regardless of state requirements, it is preferred practice to have a written Operati ng Agreement.
If you don’t create a written Operating Agreement, the LLC laws of your state will govern your
LLC. The Operating Agreement is kept by the members (each should have an updated copy), a nd
is not filed with the government.
The LLC operating agreement may vary in complexity, but normally contains the fol lowing
information:
* Company name and address information
* Name and address information for each LLC member
* LLC management structure and operation
* Items/Funds contributed by each Member
* Fair market value of each item contributed
* Date/triggers of company dissolution, if any
* Accounting methods
* Tax treatment decisions for your LLC
* Appointment of LLC officers, if any
* Designation of a final capital pay-in date, if any
OPEN A BANK ACCOUNT
Most banks require only a copy of your Articles of Organization and your federal Employer ID
Number to open a bank account. Some, however, may also require a resolution authorizing the
opening of the account passed by the LLC’s members and a copy of the LLC Operating
Agreement. Because bank requirements vary by bank, you should contact the branch manager
and ask about their requirements for new LLC accounts.
MEMBER MEETINGS
Although a corporation’s owners’ failure to hold shareholder or director meetings may subject
the owners to liability, this is not the case for LLCs in many states. If the L LC’s Articles of
Organization or Operating Agreement do not expressly require such meetings, such liability wi ll
normally not attach for failure to have member meetings. While many states do not require that
your limited liability company hold meetings on a regularly scheduled basis, it is advisable to
conduct member meetings to protect the integrity of the LLC’s operations and minimi ze
disagreements.
* * *
SELECTIONS FROM STATUTES
§203. Formation. (a) One or more persons may act as an organizer or organizers to form a
limited liability company by (i) preparing the articles of organization of such li mited liability
company in accordance with subdivision (e) of this section, (ii) executing such articl es of
organization in accordance with section two hundred seven of this article and (iii) fi ling such
articles, entitled "Articles of organization of... (name of limited liabilit y company) under
section two hundred three of the Limited Liability Company Law," in accordance with section
two hundred nine of this article.
(b) An organizer may, but need not be, a member of the limited liability compa ny that he or she
forms.
(c) At the time of its formation, a limited liability company must have at least one member.
(d) A limited liability company is formed at the time of the filing of the i nitial articles of
organization with the department of state or at any later time specified in the articles of
organization, not to exceed sixty days from the date of such filing. The filing of the articles of
organization shall, in the absence of actual fraud, be conclusive evidence of the forma tion
of the limited liability company as of the time of filing or effective da te if later, except in an
action or special proceeding brought by the attorney general. A limited liability company
formed under this chapter shall be a separate legal entity, the existence of whic h as a separate
legal entity shall continue until the cancellation of the limited lia bility company’s articles of
organization.
(e) The articles of organization of a limited liability company shall set forth:
SEE FORM 2: Articles of Organization
§204. Limited liability company name. The name of each limited liability company as set
forth in its articles of organization:
(a) shall contain without abbreviation the words "Limited Liability Company" or the
abbreviation "L.L.C." or "LLC";
(b) shall be such as to distinguish it from the name of (i) any domestic limited li ability
company, (ii) any authorized foreign limited liability company or (iii) a fictiti ous name of an
authorized foreign limited liability company filed pursuant to section eight hundred two of
this chapter, in each case, as such names appear on the index of names of existi ng domestic and
authorized foreign limited liability companies of any type or kind, including fictiti ous names
of authorized foreign limited liability companies filed pursuant to section eight hundred two
of this chapter, in the department of state, or names the right to which are reserved;
(c) shall, unless the limited liability company or foreign limited liabili ty company shall have
complied with the provisions of section one hundred thirty of the general business law, be the
name used by the limited liability company in its conduct of business;
(d) shall not contain any word or phrase, or any abbreviation or derivative thereof, the use
of which is prohibited or restricted by any other statute of this state, unless in the latter case the
restrictions have been complied with;
(e) shall not contain the following phrases or any abbreviation or derivative thereof:
board of trade state police
chamber of commerce state trooper
community renewal tenant relocation
corporation urban development
incorporated urban relocation
partnership
(f) shall not contain the following words, or any abbreviation or derivative thereof:
acceptance bond guaranty mortgage
annuity casualty indemnity savings
assurance doctor insurance surety
attorney endowment investment title
bank fidelity lawyer trust
benefit finance loan underwriter…
§207. Execution of articles or certificates.
(a) Each article or certificate required by this chapter to be filed with t he department of state
shall be executed in the following manner:
(1) the initial articles of organization must be signed by an organizer or organizers of the
limited liability company;
(2) a certificate of amendment must be signed by at least one member, manager or authorized
person of the limited liability company;
(3) restated articles of organization or amended and restated articles of organiza tion must be
signed by at least one member, manager or authorized person of the limited liabili ty
company;
(4) a certificate of correction must be signed by at least one member, manager or authorized
person of the limited liability company;
(5) a certificate of cancellation must be signed by at least one member, mana ger or
authorized person of the limited liability company; and
(6) all other certificates must be signed by at least one member, manager or authori zed
person of the limited liability company. (b) Any person may sign any articles or certificate by an attorney in fact. Powers of at torney
relating to the signing of articles or a certificate by an attorney in fact ne ed not be filed with the
department
of state or provided as evidence of authority by the person filing but must be retained in the
records of the limited liability company. (c) Each article or certificate must be signed.
(d) Each article or certificate must include the name and capacity of each signer.
* * *
Forms List
The following forms are available for download with this package. NY-NAMERESV: Application for Reservation of Entity Name
NY-00LLCT: Articles of Organization
NY-LLC-TL: Sample Transmittal Letter
NY-00LLC-1: Sample Operating Agreement (Multi-Member LLC)
NY-00LLC-2: Sample Operating Arrangement (Single-Member LLC)
US-IRS-SS-4 : Application for Federal Tax Identification Number & Instructions
NY-2222LLC: Sample LLC Notices & Resolutions
Instructions on using the forms are either included with the forms and/or found in the Steps to
form LLC section, below.
* * *
Notes on Downloading the Forms
In order that we can provide you with the most up to date forms at all times, all forms are located
on our servers for you to down load, complete and print. Downloading instructions are provided
and we will assist if you have any problems.
From the the download page, the easiest procedure to download the forms is to right click on the
form links and select “save target as” to save each form to your hard drive.
You will have six days during which you can return to the forms download page to download the
forms again if needed. You are advised to save the forms to your computer as soon as possible to
avoid any problem with the six day limit. * * *
Notes on Completing the Forms
The forms in this package may be available in Adobe Acrobat (“.pdf”) and/or Microsoft Word
(“.doc”) format.
If available in .pdf format, the forms will contain “fillable” blanks which you can type directly
into, and print. However, you can still print the form and fill in with a typewriter or by hand if
you desire.
If available in .doc format, the forms may contain “form fields” created using Microsoft Word.
“Form fields” facilitate completion of the forms using your computer. They do not limit you
ability to print the form “in blank” and complete with a typewriter or by hand. To c omplete the
forms click on the gray shaded areas and type the information. For the separation agree ment
complete the gray shaded areas and also make any other changes or additions to resolve all
issues.
If you do not see the gray shaded form fields, go the View menu, click on Toolbars, and then
select Forms. This will open the forms toolbar. Look for the button on the forms toolbar that
resembles a shaded letter “a”. Click in this button and the form fields, if present , will become
visible. If there are no form fields, just type into the document, underlining if necessary, to
complete the form.
Some forms may be “locked” which means that the content of the forms cannot be cha nged
unless the form is unlocked. You can only fill in the information in the fields. If you need to
make any changes in the body of the form, it is necessary for you “unlock” or “unprotect” the
form. IF YOU INTEND TO MAKE CHANGES TO THE CONTENT, DO SO BEFORE YOU
BEGIN TO FILL IN THE FIELDS. IF YOU UNLOCK THE DOCUMENT AFTER YOU
HAVE BEGUN TO COMPLETE THE FIELDS, WHEN YOU RELOCK, ALL
INFORMATION YOU ENTERED WILL BE LOST. To unlock click on “Tools” in the Menu
bar and then selecting “unprotect document”. You may then be prompted to enter a password. If
so, the password is “uslf”. That is uslf in lower case letters without the quotation ma rks. After
you make the changes relock the document before you begin to complete the fields. Afte r any
required changes relock the form, then click on the first form field and enter the require d
information. You will be able to navigate through the document from form field to form fiel d
using your tab key. Tab to a form field and insert your data.
If you experience problems, please let us know.
* * *
Steps to form LLC
Step 1:See FORM: NY-NAMERESV
APPLICATION FOR RESERVATION OF NAME
It is recommended that you reserve a LLC name in order to assure that your
Articles of Organization are not rejected because the name you have selected is
not available
You may skip this step and go to Step 2, but if the name you have selected is
not available, the Articles of Organization will be rejected and returned to you. The Application for Reservation of Name should by typewritten or printed
legibly in black ink.
Provide the Applicant's name and STREET address.
Enter the LLC name you want to reserve.
NOTE: LIMITATIONS ON A LLC NAME:
1. A LLC name MUST contain the words "Limited Liability Company," or
the abbreviation "L.L.C.," or the designation "LLC."
2. A LLC name shall be such as to distinguish it from the name of any domestic limited liability company, any authorized foreign limited liabili ty
company or a fictitious name of an authorized foreign limited liability
company as such names appear on the index of names of existing domestic
and authorized foreign limited liability companies of any type or kind,
including fictitious names of authorized foreign limited liability
companies, or names the right to which are reserved.
3. A LLC name shall, unless the limited liability company or foreign limited liability company shall have complied with the provisions of section one
hundred thirty of the general business law, be the name used by the limited
liability company in its conduct of business.
4. A LLC name shall not contain any word or phrase, or any abbreviation or derivative thereof, the use of which is prohibited or restricted by any other
statute of this state, unless in the latter case the restrictions have bee n
complied with.
5. A LLC name shall not contain the following phrases or any abbreviation or derivative thereof: board of trade, state police, chamber of commerce,
state trooper, community renewal, tenant relocation, corporation, urban
development, incorporated, urban relocation, or partnership.
6. A LLC name shall not contain the following words, or any abbreviation or derivative thereof: acceptance, guaranty, annuity, indemnity, assurance,
insurance, attorney, investment, bank, lawyer, benefit, loan, bond,
mortgage, casualty, savings, doctor, surety, endowment, title, fidelity,
trust, finance, underwriter unless the approval of the superintendent of
banks or the superintendent of insurance, as appropriate, is attached to the
articles of organization or unless the word "doctor" or "lawyer" or an
abbreviation or derivative thereof is used in a context that clearly denotes
a purpose other than the practice of law or medicine.
7. A LLC name shall not, unless the approval of the state department of social services is attached to the articles of organization or application for
authority, contain the word "blind" or "handicapped." Such approval shall
be granted by the state department of social services if in its opinion the
word "blind" or "handicapped" as used in the limited liability company's
proposed name will not tend to mislead or confuse the public into
believing that the limited liability company is organized for charitable or
nonprofit purposes related to the blind or the handicapped;
8. A LLC name shall not, unless the approval of the attorney general is attached to the articles of organization or application for authority, contain
the word "exchange" or any abbreviation or derivative thereof. Such
approval shall not be granted by the attorney general if in his or her
opinion the use of the word "exchange" in the limited liability company's
proposed name would falsely imply that the limited liability company
conducts its business at a place where trade is carried on in securities or
commodities by brokers, dealers or merchants.
Check the blank beside “New domestic limited liability company.”
Have the Applicant sign and the type or print the name of the Applicant.
A LLC name reservation is valid for a 60 day period. The reservation can be
extended for ONLY two additional 60 day periods.
The filing fee to reserve a LLC name is $20.00.
File the original and one copy of the Application for Reservation of Name.
You will, upon approval and reservation of the name, be issued a Certificate
of Reservation. THIS CERTIFICATE MUST BE ATTACHED TO THE
ARTICLES OF ORGANIZATION WHEN THEY ARE FILED.
Mail the original and one copy of the Application for Reservation of Name
along with the $20.00 filing fee (Make check payable to the New York
Department of State) , to:
New York Department of State
Division of Corporations
41 State Street,
Albany, NY 12231
Telephone: (518) 474-0050
Step 2: See FORM: NY-00LLCT
ARTICLES OF ORGANIZATION
Once you have reserved the limited liability company name, or if you have chosen
to proceed without reserving a name, you are ready to complete the Articles of
Organization.
Instructions to complete the LLC Articles of Organization: The Articles of Organization MUST by typewritten or printed in black ink.
Type in the name you have reserved at the top center of the page.
FIRST: Provide the LLC name you have reserved. BE SURE TO ATTACH
THE CERTIFCATE OF RESERVATION TO THE ARTICLES OF
ORGANIZATION.
SECOND: Provide the name of the county where the office of the LLC will be
located.
THIRD: Provide the address where the Secretary of State should mail any
process which is served on upon the Secretary.
Have the Organizer sign the Articles and indicate that she/he is signing in the
capacity of Organizer.
Provide the name and mailing address of the Organizer on the second page.
This page must be filed with the first page.
The filing fee for the Articles of Organization is $200.00.
File the original and one copy of the Articles of Organization.
SPECIAL NOTE
Within one hundred twenty days after the effectiveness of the initial article s of organization, a
copy of the same or a notice containing the substance thereof shall be published once in e ach
week for six successive weeks, in two newspapers of the county in which the of fice of the limited
liability company is located, to be designated by the county clerk, one of which ne wspapers shall
be a newspaper published in the city or town in which the office is intended to be located, if a
newspaper be published therein; or, if no newspaper is published therein, in the newspaper
nearest thereto, and proof of such publication by the affidavit of the printer or publisher of
each of such newspapers must be filed with the department of state. The notice shall incl ude:
(1) the name of the limited liability company; (2) the date of filing of the articl es of organization
with the secretary of state; (3) the county within this state, in which the off ice of the limited
liability company is to be located; (4) a statement that the secretary of state has bee n designated
as agent of the limited liability company upon whom process against it may be served and the
post office address within or without this state to which the secretary of state shall mail a copy of
any process against it served upon him or her; (5) if the limited liability company is to have a
registered agent, his or her name and address within this state and a statement that the
registered agent is to be the agent of the limited liability company upon whom process against
it may be served; (6) if the limited liability company is to have a specific date of
dissolution, the latest date upon which the limited liability company is to dissolve; and (7) the
character or purpose of the business of such limited liability company.
Step 3: Mail the original and one copy of the ARTICLES OF ORGANIZATION and
the $200.00 filing fee (make check payable to New York Department of State) to:
New York Department of State
Division of Corporations
41 State Street
Albany, NY 12231
Fax: (518) 474-4765
Telephone: (518) 474-0050
A cover letter to send with the Articles of is included in this packet.
See FORM: NY-LLC-TL
SAMPLE TRANSMITTAL LETTER
Step 4: Complete an Operating Agreement. See FORM: NY-00LLC-1
SAMPLE OPERATING AGREEMENT (MULTI-MEMBER LLC)
For a single-member LLC,
See FORM: NY-00LLC-2
SAMPLE OPERATING ARRANGEMENT (SINGLE-MEMBER LLC)
Step 5: Apply for a Federal Tax Identification Number. This is done with form US-IRS- SS-4. Mail to your regional IRS office.
See Supplemental Form: US-IRS-SS-4
FEDERAL TAX ID APPLICATION AND INSTRUCIONS
Step 6: Open a bank account and conduct business.
Ongoing: Sample Notices and Resolutions are provided for your convenience. See FORM: NY-2222LLC
Sample LLC Notices & Resolutions
* * *
Accessories
U. S. Legal Forms, Inc. offers the following LLC accessories:
LLC Seal: If you would like to order a LLC seal call U.S. Legal Forms, Inc. at (601)
825-0382. Engraved with your company name: $24.95 plus shipping, or see
http://www.uslegalbookstore.com/officeproducts/
Imprinted (or blank) Lithographed LLC Membership Certificates:
Preview
Order for your state
* * *
SAMPLE OWNERSHIP LEDGERand
SIMPLE MEMBERSHIP CERTIFICATE
Ownership Ledger
Name and Residence
Address of LLC Member Date of
Transfer % Ownership Amount Paid Subsequent
Transfer
Membership Certificate
No. _____ LIMITED LIABILITY COMPANY- STATE OF NEW YORK Percentage: ___
This Certificate certifies that ____________________________, is a true and
lawful owner of ____ percent ownership of ______________________________,
a New York Limited Liability Company. Such ownership interest is only t ransferable in
accordance with the Operating Agreement between the Members.
This certificate is issued by the Company by its duly authorized
officers on this the ____ day of _________, 20___.
__________________ ___________________
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