PROFESSIONAL SERVICE
LIMITED LIABILITY COMPANY PACKET
for STATE-LICENSED PROFESSIONALS
STATE OF NEW YORK Electronic Version
STATUTORY REFERENCE
New York Consolidated Laws: Chapter 34, Article XII[You should be thoroughly familiar with this Article.]
http://assembly.state.ny.us/leg/?cl=57&a=12
New York State Education Department Office of the Professions
http://www.op.nysed.gov/
INTRODUCTION AND LAW SUMMARY
The practice of a profession in the State of New York by a professional service limited liability
company is controlled generally by the New York Limited Liability Law as set out in NEW
YORK CONSOLIDATED LAWS, Chapter 34. Both individuals and professional service limited
liability companies which engage in the practice of a profession are subject to t he rules and
regulations of the New York State governing board/entity for their profession (see, New York
State Education Department Office of the Professions link, above).
These selected definitions are applicable to a professional service limited liability company:
1. The "licensing authority" is the regents of the university of the state of New York or t he state
education department, as the case may be, in the case of all professions license d under title
eight of the education law.
2. "Profession" includes those professions designated in title eight of the education law,
requiring a state-issued license to practice the profession.
3. "Professional" means an individual duly authorized to practice a profession, a professional service corporation, a professional service limited liability company, a foreign professiona l
service limited liability company, a registered limited liability partnershi p, a foreign limited
liability partnership, a foreign professional service corporation or a professional partnership.
4. A "professional service" is any type of service to the public that may be lawfully rende red by
a member of a profession within the purview of his or her profession.
5. A "professional service limited liability company" is a limited liability company organized
under New York Limited Liability Company Law to render a professional service.
One or more professionals, each of whom is authorized by law to render a professional service
within the state, or one or more professionals, at least one of whom is authorized by law t o
render a professional service within the state, may form a professional service limite d liability
company for pecuniary profit for the purpose of rendering the professional service or services as
such professionals are authorized to practice.
Notwithstanding any other provision of law, the name of a professional service limited liability
company may contain any word that can be used in the name of a partnership or professional
service corporation practicing a profession that the limited liability company is a uthorized to
practice. The name may not contain any word that could not be used by a partnership or
professional service corporation. The name of a professional service limited liability c ompany
may not contain the name of a deceased person unless:
1. Such person's name was part of the name of such limited liability company at the time of
such person's death; or
2. Such person's name was part of the name of an existing partnership or professional service corporation and at least two-thirds of such partnership's partners or corporation's
shareholders, as the case may be, become members of such limited liability company.
A professional service limited liability company name must end with the words "Professional
Limited Liability Company" or "Limited Liability Company" or the abbreviati on "P.L.L.C.",
"PLLC", "L.L.C." or "LLC".
The articles of organization of a professional service limited liability company m ust meet the
requirements of the Limited Liability Company Law and must state:
1. The profession or professions to be practiced by the limited liability company;
2. The names and residence addresses of all individuals who are to be the original membe rs and
the original managers, if any, of such limited liability company;
3. The names and residence addresses or, if none, the business address of all shareholders,
directors, officers, members, managers and partners of all professional service corporations,
foreign professional service corporations, professional service limited liability companies,
foreign professional service limited liability companies, registered limited liabi lity
partnerships, foreign limited liability partnerships, and professional partnerships who are to
be the original members or managers, if any, who are individuals of such limited liabil ity
company;
There must be filed with the articles of organization a certificate or cert ificates issued by the
licensing authority certifying that each of the proposed members and managers, if any, who are
individuals is authorized by law to practice a profession that the limited lia bility company is
being formed to practice and, if applicable, that one or more of such individuals are authorized to
practice within the state each profession that such limited liability compa ny will be authorized to
practice.
A certified copy of the articles of must be filed by the professional service limi ted liability
company with the licensing authority within thirty days after the filing of such certificate.
Within one hundred twenty days after the filing of the articles of organization, a copy of t he
articles or a notice containing the substance of the articles must be published onc e in each week
for six successive weeks in two newspapers of the county in which the office of the professional
service limited liability company is located, to be designated by the county cl erk, one of which
newspapers shall be a newspaper published in the city or town in which the office is intende d 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 not ice must
include:
1. The name of the professional service limited liability company;
2. The date of filing of the articles of organization with the secretary of state;
3. The county within New York, in which the office of the professional service limited liability
company is to be located;
4. A statement that the secretary of state has been designated as agent of the profe ssional
service limited liability company upon whom process against it may be served and the post
office address within or without New York to which the secretary of state shall mail a copy
of any process against it served upon him or her;
5. If the professional service limited liability company is to have a registered age nt, his or her
name and address within New York and a statement that the registered agent is to be the
agent of the professional service limited liability company upon whom process against it may
be served;
6. If the professional service limited liability company is to have a specific da te of dissolution
in addition to the events of dissolution set forth in the Limited Liability Company Law, the
latest date upon which the professional service limited liability company is to dissolve; and
7. The character or purpose of the business of the professional service limited liability
company.
Failure to cause the notice to be published or to file such proof within one hundred twenty days
of the filing of the articles shall prohibit the professional service limited li ability company from
maintaining any action or special proceeding in New York unless and until such professional
service limited liability company causes such notice to be published and file s such proof of
publication. The failure of a professional service limited liability company to ca use such notice
to be published or to file proof of publication shall not impair the validity of any cont ract or act
of the professional service limited liability company or the right of any other party t o the contract
to maintain any action or special proceeding thereon, and shall not prevent the professiona l
service limited liability company from defending any action or special proceeding in New York.
No professional service limited liability company may render a professional service exce pt
through individuals authorized by law to render such professional service, as individuals.
Each member, manager, employee or agent of a professional service limited liabil ity company is
personally and fully liable and accountable for any negligent or wrongful act or misconduct
committed by him or her or by any person under his or her direct supervision and control while
rendering professional services on behalf of the limited liability company.
No professional service limited liability company may engage in any profession or professions
other than those set forth in its articles of organization. A professional service limit ed liability
company may only engage in a profession or professions as to which one or more of its members
is authorized by law to render professional services in New York. In addition to engaging in such
profession or professions, a professional service limited liability company may carry on, or
conduct or transact any other business or other activities as to which a limited l iability company
may be formed.
A member of a professional service limited liability company may be only:
1. A professional, other than a foreign professional service corporation, foreign professional service limited liability company or foreign limited liability partnership, authorized by law to
practice in
2. New York a profession that such limited liability company is authorized to practic e and who
is or has been engaged in the practice of such profession in such limited liability company or
a predecessor entity, or who will engage in the practice of such profession in such limit ed
liability company within thirty days of the date such professional becomes a member;
3. A professional, other than a foreign professional service corporation, foreign professional service limited liability company or foreign limited liability partnership, authorized by law to
practice in any foreign jurisdiction a profession that such limited liability company is
authorized to practice and who is or has been engaged in the practice of such profession in
such limited liability company or a predecessor entity, or who will engage in the practice of
such profession in such limited liability company within thirty days of the date such
professional becomes a member; or
4. A foreign professional service corporation, foreign professional service limited liability company or foreign limited liability partnership authorized by law to practice in Ne w York or
in any foreign jurisdiction a profession that such limited liability company is authori zed to
practice and who is or has been engaged in the practice of such profession in such li mited
liability company or a predecessor entity, or who will engage in the practice of suc h
profession in such limited liability company within thirty days of the date such professiona l
becomes a member.
No member of a professional service limited liability company may enter into a voting trust
agreement, proxy or any other type of agreement vesting in another person, other than another
member of the limited liability company or professional who would be eligible to be come a
member of such limited liability company, the authority to exercise voting power of a ny or all of
the membership interests of the limited liability company. All membership inte rests or proxies
granted or agreements made in violation of this statutory prohibition are void.
If any member, manager or employee of a professional service limited liability c ompany who has
been rendering professional service to the public becomes legally disqualified to pract ice his, her
or its profession within New York, he, she or it shall sever all employment with and financ ial
interests (other than interests as a creditor or vested rights under a bona fide retire ment program)
in the limited liability company forthwith.
All provisions of law regulating the rendering of professional services by a person elected or
appointed to a public office shall be applicable to a member, manager or employe e of such
limited liability company in the same manner and to the same extent as if fully set forth herein.
Such legal disqualification to practice such profession within New York shall be deemed to
constitute an irrevocable offer by the disqualified member to sell his, her or its mem bership
interest to the professional service limited liability company, pursuant to the provi sions of New
York Limited Liability Law or of the articles of organization or operating agreeme nt, whichever
is applicable. Compliance with the terms of such an offer shall be specificall y enforceable in the
courts of New York. A professional service limited liability company's failure to enforce
compliance with this provision shall constitute a ground for its dissolution.
A professional service limited liability company must purchase or redeem the membershi p
interest of a member in case of such member's death or disqualification, or in the case of a
member that is a professional service corporation, foreign professional service corporation,
professional service limited liability company, foreign professional service limited li ability
company, registered limited liability partnership, foreign limited liability partne rship or
professional partnership, dissolution or disqualification of such professional service corporation,
foreign professional service corporation, professional service limited liability company, foreign
professional service limited liability company, registered limited liability partnership, foreign
limited liability partnership or professional partnership (in the case of registered limi ted liability
partnership, foreign limited liability partnership and professional partnership, other than a
dissolution followed by a reconstitution where at least a majority of the total int erests in the
current profits of a successor partnership are held by partners of the predecessor partnership that
was a registered limited liability partnership, foreign limited liability partnership or professional
partnership who were partners of such predecessor partnership immediately prior to the
dissolution of such predecessor partnership) or the death, dissolution or disqualification of all of
its shareholders, members or partners, within six months after the appointment of the executor or
administrator or other legal representative of the estate of such deceased member, or within six
months after such disqualification or dissolution, at the book value of such membership interest
as of the end of the month immediately preceding the death, disqualification or dissolut ion of the
member as determined from the records of the limited liability company in a ccordance with its
regular method of accounting. The operating agreement of the limited liability c ompany may
modify this statutory provision by providing for a shorter period of purchase or redemption, or an
alternate method of determining the price to be paid for the membership interest , or both. If the
limited liability company fails to purchase or redeem such membership interest wi thin the
required period, a successful plaintiff in an action to recover the purchase price of such
membership interest shall also be awarded reasonable attorneys' fees and costs. These st atutory
restrictions do not require the purchase of the membership interest of a disqualified membe r
where the period of disqualification is for less than six months and the member again be comes
eligible to practice his or her profession within six months from the date of disqualification.
No member of a professional service limited liability company may sell or assign his, her or its
membership interest in such limited liability company except to another professional eligible to
become a member of such limited liability company or except in trust to another professional
who would be eligible to become a member if such professional were employed by such lim ited
liability company.
Any sale or transfer, except by operation of law or court decree or except for a professional
service limited liability company having only one member, may be made only after the same
shall have been approved by the vote or written consent of such proportion, not less than a
majority in interest of the members, exclusive of the interest of the member proposing to sell or
transfer such membership interest, as may be provided in the operating agreement of such
professional service limited liability company. The voting interest held by the mem ber proposing
to sell or transfer his, her or its membership interest may not be voted or counted for any
purpose, unless all the members consent that such interests be voted or counted. The professional
service limited liability company may provide, in lieu of or in addition to t he foregoing
provisions, for the alienation of membership interests and may require the redemption or
purchase of such membership interests by the limited liability company at prices and in a manner
specifically set forth. The existence of the restrictions on the sale or transfer of a membership
interest, if applicable, in the operating agreement, shall be noted conspicuously on the face or
back of every certificate representing a membership interest issued by a professional servi ce
limited liability company. Any sale or transfer in violation of these restrictions is void.
NOTE: YOU MUST CHECK WITH THE NEW YORK STATE EDUCATION
DEPARTMENT OFFICE OF THE PROFESSIONS TO ASSURE THAT YOU ARE
PROPERLY LICENSED PRIOR TO OPENING FOR BUSINESS.
http://www.op.nysed.gov/
Steps to Form PLLC
Step 1: See FORM 1 - APPLICATION FOR RESERVATION OF NAMEIt is recommended that you reserve a PLLC 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 PLLC NAME:
Notwithstanding any other provision of law, the name of a professional
service limited liability company may contain any word that, at the time of
formation, could be used in the name of a partnership or professional service
corporation practicing a profession that such limited liability company
is authorized to practice and may not contain any word that could not be
used by such a partnership or professional service corporation; provided,
however, the name of a professional service limited liability company may
not contain the name of a deceased person unless: (1) such person’s name was
part of the name of such limited liability company at the time of such person’s
death; or (2) such person’s name was part of the name of an existing
partnership or professional service corporation and at least two-thirds of such
partnership’s partners or corporation’s shareholders, as the case may be,
become members of such limited liability company. (b) A professional
service limited liability company name shall end with the words "Professional
Limited Liability Company" or "Limited Liability Company" or the
abbreviation “P.L.L.C.”, “PLLC”, “L.L.C.” or “LLC”. The provisions of
subdivision (a) of section two hundred four of this chapter shall not apply to a
professional service limited liability company.
Check the blank beside "New domestic limited liability company.
Have the Applicant sign and the type or print the name of the Applicant.
A PLLC 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
Fax: (518) 474-4765
Telephone: (518) 474-0050
Step 2: SEE FORM 2 –ARTICLES OF ORGANIZATION
Once you have reserved the PLLC 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 Professional Service Limited Liability Company
Articles of Organization:
Download and complete the form.
Attach the appropriate certificate(s) of license from the appropriate Division
of the New York State Education Department.
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.
Attach the Certificate of Registration of Name, if you reserved a name.
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 3 – TRANSMITTAL LETTER
Step 4: Upon return of the Articles of Organization complete the Operating Agreement.
SEE FORM 4 – OPERATING AGREEMENT
Step 5: Apply for a Federal Tax Identification Number. This is done with form SS-4. Mail to your regional IRS office.
SEE FORM 5 – IRS-SS-4 & IRS-SS-4-I (instructions)
Step 6: Open a bank account and conduct business.
Disclaimer: If you are not an attorney, you are advised to seek the advice of an attorney for all serious legal matters. The information and forms contained herein are
not legal advice and are not to be construed as such. Although the
information contained herein is believed to be correct, no warranty of fitness
or any other warranty shall apply. All use is subject to the U.S. Legal Forms,
Inc. Disclaimer and License located at
http://www.uslegalforms.com/disclaimer.htm
FORMS DOWNLOAD
To access the download page please do the following:
IMPORTANT NOTE: WRITE DOWN THE USERNAME AND PASSWORD SHOWN
BELOW BECAUSE YOU WILL NEED TO ENTER IT EXACTLY (case sensitive) TO
DOWNLOAD THE FORMS.
The download page you will access by using the link below contains links to download the forms
for this package, as well as a brief description of each form. Once you reach 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.
To access the download page you are required to use the following login (PLEASE WRITE
THIS DOWN):
USERNAME: nyc123
PASSWORD: fhu789
The download link can be accessed by any of the following methods: - Copy the link below and paste into your browser URL location.
- Type the link below exactly (case sensitive) as shown into your browser.
- Click on the highlighted link below.
Download Link:
http://www.uslegalforms.com/data/corp/NY-00LLC/NY-00PLLC.htm
http://www.uslegalforms.com/data/corp/NY-00LLC/NY-00PLLC.htm
FORM 4
SAMPLE OPERATING AGREEMENT
This agreement is a sample operating agreement and should be modified to meet your needs. It provides for the
PLLC to be operated by one or more managers OR by the members. You will have to decide how you want your
PLLC to operate.
INSERT THE NAME OF YOUR PROFESSION/PRACTICE INTO THE BLANKS WHERE APPROPRIATE.
Read carefully and make appropriate changes to suit your individual
needs and purposes.
OPERATING AGREEMENTOF
______________________________________
A NEW YORK PROFESSIONAL SERVICE LIMITED LIABILITY COMPANY
THIS OPERATING AGREEMENT ("Agreement") is entered into the __________ day of
_____________________, 20______, by and between the following persons: 1. _______________________________________________________________
2. _______________________________________________________________
3. _______________________________________________________________
4. _______________________________________________________________
hereinafter, ("Members" or “Parties”).
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledged, the Parties covenant, contract and agree as follows:
ARTICLE I
FORMATION OF PROFESSIONAL SERVICE LIMITED LIABILITY COMPANY
1. Formation of PLLC. The Parties have formed a New York professional limited liabilit y
company named _________________________________________________________
("PLLC"). The operation of the PLLC shall be governed by the terms of this Agreement and
the provisions of the New York Limited Liability Company Act, Article XII, hereinafter
referred to as the "Act". To the extent permitted by the Act, the terms and provisions of this
Agreement shall control if there is a conflict between such Law and this Agreem ent. The
Parties intend that the PLLC shall be taxed as a partnership. Any provisions of this
Agreement, if any, that may cause the PLLC not to be taxed as a partnership shall be
inoperative.
2. Certificate of Formation. The Members acting through one of its Members,
_____________________________________, filed an Application to Form a Limited
Liability Company ("Certificate") for record in the office of the with the New York Sec retary
of State on _________________________, thereby creating the PLLC.
3. Business. The business of the PLLC shall be to engage in the practice of _______________.
4. Registered Office and Registered Agent. The registered office and place of business of the
PLLC shall be ___________________________________________________
______________________________________ and the registered agent at such office shall be
________________________________________________________________________. The
Members may change the registered office and/or registered agent from time to time.
5. Duration. The PLLC will commence business as of the date of filing and will continue in
perpetuity.
6. Fiscal Year. The PLLC's fiscal and tax year shall end December 31.
ARTICLE II MEMBERS
7. Initial Members. All members of the PLLC shall be licensed to practice _______________ in
New York. The initial members of the PLLC, their initial capital contributions, and their
percentage interest in the PLLC are:
Initial Members Percentage Interest Capital
Name in PLLC Contribution
8. Additional Members. New members may be admitted only upon the consent of a majority of
the Members and upon compliance with the provisions of this agreement. All new members
shall be licensed to practice ________________ in New York.
ARTICLE III
MANAGEMENT
9. Management. The Members have elected to manage the PLLC as follows (check as
appropriate):
The management of the PLLC shall be vested in the Members without an appointe d
manager. The members shall elect officers who shall manage the company. The Preside nt
and Secretary may act for and on behalf of the PLLC and shall have the power and authority
to bind the PLLC in all transactions and business dealings of any kind except as otherwi se
provided in this Agreement.
The Members hereby delegate the management of the PLLC to Manager(s), subject to
the limitations set out in this agreement.
(a) The Members shall elect and may remove the Manager(s) by majority vote.
(b) A Manager shall serve until a successor is elected by the Members.
(c) The Manager(s) shall have the authority to take all necessary and proper actions in order to conduct the business of the PLLC.
(d) Except for decisions concerning distributions, any Manager can take any appropriate action on behalf of the PLLC, including, but not limited to signing checks, execut ing
leases, and signing loan documents.
(e) In determining the timing and total amount of distributions to the Members, the ac tion
of the Manager shall be based on a majority vote of the Managers, with or without a
meeting.
(f) The compensation to the Manager(s) shall be in the discretion of the majority of the
Members of the PLLC.
(g) Each manager shall be licensed to practice _______________ in New York.
(h) There shall be _________ initial Managers.
(i) The initial Manager(s) is/are: _________________________________________________________ _________________________________________________________ _________________________________________________________
10. Officers and Relating Provisions. In the event the Members elect to manage the PLLC ,
rather than appointing a manager, the Members shall appoint officers for the PLLC and the
following provisions shall apply:
(a) Officers. The officers of the PLLC shall consist of a president, a treasurer and a
secretary, or other officers or agents as may be elected and appointed by the
Members. A Member may hold more than one or all offices. The officers shall act in
the name of the PLLC and shall supervise its operation under the direction and
management of the Members, as further described below. All officers shall be
members of the PLLC.
(b) Election and Term of Office. The officers of the PLLC shall be elected annuall y by
the Members by a majority vote. Vacancies may be filled or new offices created and
filled at any meeting of the Members. Each officer shall hold office until his/her
death, until he/she shall resign, or until he/she is removed from office. Election or
appointment of an officer or agent shall not of itself create a contract right.
(c) Removal. Any officer or agent may be removed by a majority of the Members
whenever they decide that the best interests of the Company would be served thereby.
Such removal shall be without prejudice to the contract rights, if any, of the person so
removed.
(d) Vacancies. A vacancy is any office because of death, resignation, removal,
disqualification or otherwise may be filled by the Members for the unexpired portion
of the term.
(e) President. The President shall be the chief executive officer of the PLLC and sha ll
preside at all meetings of the Members. The President shall have such other powers
and perform such duties as are specified in this Agreement and as may from time to
time be assigned by the Members of the PLLC.
(f) The Treasurer. The Treasurer shall be the chief financial officer of the PLLC. T he
Treasurer shall not be required to give a bond for the faithful discharge of his/her
duties. The Treasurer shall: (i) have charge and custody of and be responsible for all
funds and securities of the PLLC; (ii) in the absence of the President, preside at
meetings of the Members; (iii) receive and give receipts for moneys due and payable
to the PLLC from any source whatsoever, and deposit all such moneys in the name of
the PLLC in such banks, trust companies or other depositaries as shall be selected by
the Members of the PLLC; and (iv) in general perform all the duties incident to t he
office of treasurer and such other duties as from time to time may be assigned by the
President or by the Members of the PLLC.
(g) Secretary. The secretary shall: (i) keep the minutes of the Members meetings in one
or more books provided for that purpose; (ii) see that all notices are duly given in
accordance with the provisions of this Agreement or as required by law; (iii) be
custodian of PLLC records; (iv) keep a register of the post office address of each
Member; (v) certify the Member’s resolutions; and other documents to the PLLC as
true and correct; (vi) in the absence of the President and Treasurer, preside at
meetings of the Members and (vii) in general perform all duties incident to the offic e
of secretary and such other duties as from time as may be assigned by the President or
the Members.
11. Member Only Powers. Notwithstanding any other provision of this Agreement, only a
majority of the Members may: (a) sell or encumber (but not lease) any real estate owned by
the PLLC, or (b) incur debt, expend funds, or otherwise obligate the PLLC if the debt,
expenditure, or other obligation exceeds $_____________________.
ARTICLE IV
CONTRIBUTIONS, PROFITS, LOSSES, AND DISTRIBUTIONS
12. Interest of Members. Each Member shall own a percentage interest (sometimes referred to as
a share) in the PLLC. The Member’s percentage interest shall be based on the amount of
cash or other property that the Member has contributed to the PLLC and that percent age
interest shall control the Member’s share of the profits, losses, and distributions of the PLLC.
13. Contributions. The initial contributions and initial percentage interest of the Members are as
set out in this Agreement.
14. Additional Contributions. Only a majority of the Members of the PLLC may call on the
Members to make additional cash contributions as may be necessary to carry on the PLLC's
business. The amount of any additional cash contribution shall be based on the Member's
then existing percentage interest. To the extent a Member is unable to meet a cash call, the
other Members can contribute the unmet call on a pro rata basis based on the Members'
percentage interests at that time, and the percentage interest of each Mem ber will be adjusted
accordingly.
15. Record of Contributions/Percentage Interests. This Agreement, any amendment(s) to this
Agreement, and all Resolutions of the Members of the PLLC shall constitute the record of
the Members of the PLLC and of their respective interest therein.
16. Profits and Losses. The profits and losses and all other tax attributes of the PLLC shal l be
allocated among the Members on the basis of the Members' percentage interests in the PLLC.
17. Distributions. Distributions of cash or other assets of the PLLC (other than in dissolution of
the PLLC) shall be made in the total amounts and at the times as determ ined by a majority of
the Members. Any such distributions shall be allocated among the Members on the basis of
the Members' percentage interests in the PLLC.
18. Change in Interests. If during any year there is a change in a Member's percentage int erest,
the Member's share of profits and losses and distributions in that year shall be determined
under a method which takes into account the varying interests during the year.
ARTICLE V
VOTING; CONSENT TO ACTION
19. Voting by Members. Members shall be entitled to vote on all matters which provide for a
vote of the Members in accordance with each Member’s percentage interest.
20. Majority Required. Except as otherwise provided and delegated to the Officers or Managers,
a majority of the Members, based upon their percentage ownership, is required for any
action.
21. Meetings - Written Consent. Action of the Members or Officers may be accomplished with
or without a meeting. If a meeting is held, evidence of the action shall be by Mi nutes or
Resolution reflecting the action of the Meeting, signed by a majority of the Membe rs, or the
President and Secretary. Action without a meeting may be evidenced by a written c onsent
signed by a majority of the Members, or the President and Secretary.
22. Meetings. Meetings of the Members may be called by any Member owning 10% or more of
the PLLC, or, if Managers were selected, by any Manager of the PLLC, or if Officers we re
elected, by any officer.
23. Majority Defined. As used throughout this agreement the term “Majority” of the Members
shall mean a majority of the ownership interest of the PLLC as determined by the records of
the PLLC on the date of the action.
ARTICLE VI
DUTIES AND LIMITATION OF LIABILITY MEMBERS, OFFICERS,
AND PERSONS SERVING ON ADVISORY COMMITTEES; INDEMNIFICATION
24. Duties of Members: Limitation of Liability. The Members, Managers and officers shall
perform their duties in good faith, in a manner they reasonably believe to be in the best
interests of the PLLC, and with such care as an ordinarily prudent person in a like posit ion
would use under similar circumstances. No Member or officer, by reason of being or having
been a Member or officer, shall be liable to the PLLC or to any other Member or officer for
any loss or damage sustained by the PLLC or any other Member or officer unless the loss or
damage shall have been the result of fraud, deceit, gross negligence, willful misconduct, or a
wrongful taking by that Member or officer.
25. Members Have No Exclusive Duty to PLLC. The Members shall not be required to
participate in the PLLC as their sole and exclusive business. Members may have othe r
business interests and may participate in other investments or activities in a ddition to those
relating to the PLLC. No Member shall incur liability to the PLLC or to a ny other Member
by reason of participating in any such other business, investment or activity.
26. Protection of Members and Officers.
(a) As used herein, the term “Protected Party” refers to the Members and officers of the Company.
(b) To the extent that, at law or in equity, a Protected Party has duties (including fiduciary duties) and liabilities relating thereto to the PLLC or to any other Protected
Party, a Protected Party acting under this Agreement shall not be liable to the PLLC
or to any other Protected Party for good faith reliance on:
(i) the provisions of this Agreement;
(ii) the records of the PLLC; and/or
(iii) such information, opinions, reports or statements presented to the PLLC by any person as to matters the Protected Party reasonably believes are within such other
person’s professional or expert competence and who has been selected with
reasonable care by or on behalf of the PLLC.
(c) The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Protected Party to the PLLC or to any other Protected Party ot herwise
existing at law or in equity, are agreed by the parties hereto to replace such other
duties and liabilities of such Protected Party.
27. Indemnification and Insurance.
(i) Right to Indemnification.
(i) Any person who is or was a member or officer of the PLLC and who is or may be a party to any civil action because of his/her participation in or with
the PLLC, and who acted in good faith and in a manner which he/she
reasonably believed to be in, or not opposed to, the best interests of the
PLLC may be indemnified and held harmless by the PLLC.
(ii) Any person who is or was a member or officer of the PLLC and who is or may be a party to any criminal action because of his/her participation in or
with the PLLC, and who acted in good faith and had reasonable cause to
believe that the act or omission was lawful, may be indemnified and held
harmless by the PLLC.
(b) Advancement of Expenses. Expenses (including attorney’s fees) incurred by an
indemnified person in defending any proceeding shall be paid in advance of the
proceedings conclusion. Should the indemnified member or officer ultimately be
determined to not be entitled to indemnification, that member or officer agrees to
immediately repay to PLLC all funds expended by the PLLC on behalf of the member
or officer.
(c) Non-Exclusivity of Rights. The right to indemnification and payment of fees and
expenses conferred in this section shall not be exclusive of any right which any
person may have or hereafter acquire under any statute, provision of this Agreement,
contract, agreement, vote of Members or otherwise. The Members and officers are
expressly authorized to adopt and enter into indemnification agreements for Members
and officers.
(d) Insurance. The Members shall cause the PLLC to purchase and maintain professional
liability insurance for the PLLC, for its Members and officers, and/or on behalf of any
third party or parties whom the members might determine should be entitled to such
insurance coverage. That professional insurance policy shall be in an amount of not
less than ___________________________.
(e) Effect of Amendment. No amendment, repeal or modification of this Article shall
adversely affect any rights hereunder with respect to any action or omission occurring
prior to the date when such amendment, repeal or modification became effective.
ARTICLE VII
MEMBERS INTEREST TERMINATED
28. Termination of Membership. A Member’s interest in the PLLC shall cease upon the
occurrence of one or more of the following events: (a) A Member provided notice of withdrawal to the PLLC thirty (30) days in advance of the withdrawal date. Withdrawal by a Member is not a breach of this Agreement
(b) A Member assigns all of his/her interest to a qualified third party.
(c) A Member dies or is disqualified from practicing ______________ in New York.
(d) There is an entry of an order by a court of competent jurisdiction adjudicating the Member incompetent to manage his/her person or his/her estate.
(e) In the case of an estate that is a Member, the distribution by the fiduciary of the estate's entire interest in the PLLC.
(f) A Member, without the consent of a majority of the Members: (1) makes an assignment for the benefit of creditors; (2) files a voluntary petition in bankruptcy;
(3) is adjudicated a bankrupt or insolvent; (4) files a petition or answer seeking for
himself any reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law or regulation; (5) files an answer
or other pleading admitting or failing to contest the material allegations of a
petition filed against him in any proceeding of the nature described in this
paragraph; (6) seeks, consents to, or acquiesces in the appointment of a trustee,
receiver, or liquidator of the Member or of all or any substantial part of his
properties; or (7) if any creditor permitted by law to do so should commence
foreclosure or take any other action to seize or sell any Member's interest in the
PLLC.
(g) If within one hundred twenty (120) days after the commencement of any action against a Member seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any statute, law, or regulation, the
action has not been dismissed and/or has not been consented to by a majority of the
members.
(h) If within ninety (90) days after the appointment, without a member’s consent or acquiescence, of a trustee, receiver, or liquidator of the Member or of all or any
substantial part of the member’s properties, said appointment is not vacated or
within ninety (90) days after the expiration of any stay, the appointment is not
vacated and/or has not been consented to by a majority of the members.
(i) Any of the events provided in applicable code provisions that are not inconsistent with the dissociation events identified above.
29. Effect of Dissociation. Any dissociated Member shall not be entitled to receive t he fair value
of his PLLC interest solely by virtue of his dissociation. A dissociated Member that st ill
owns an interest in the PLLC shall be entitled to continue to receive such profit s and losses,
to receive such distribution or distributions, and to receive such allocations of income, gain,
loss, deduction, credit or similar items to which he would have been entitled if sti ll a
Member. For all other purposes, a dissociated Member shall no longer be considered a
Member and shall have no rights of a Member.
ARTICLE VIII
RESTRICTIONS ON TRANSFERABILITY OF PLLC INTEREST; SET PRICE FOR PLLC INTEREST
30. PLLC Interest. The PLLC interest is personal property. A Member has no interest in
property owned by the PLLC.
31. Encumbrance. A Member can encumber his PLLC interest by a security interest or ot her
form of collateral only with the consent of a majority of the other Members. Such consent
shall only be given if the proceeds of the encumbrance are contributed to the PLLC to
respond to a cash call of the PLLC.
32. Sale of Interest. A Member can sell his PLLC interest only to an individual licensed to
practice ________________ in New York and only as follows:
(a) If a Member desires to sell his/her interest, in whole or in part, he/she shall give written notice to the PLLC of his desire to sell all or part of his/her interest and must
first offer the interest to the PLLC. The PLLC shall have the option to buy the
offered interest at the then existing Set Price as provided in this Agreement. The
PLLC shall have thirty (30) days from the receipt of the assigning Member's notice to
give the assigning Member written notice of its intention to buy all, some, or none of
the offered interest. The decision to buy shall be made by a majority of the other
Members. Closing on the sale shall occur within sixty (60) days from the date that
the PLLC gives written notice of its intention to buy. The purchase price shall be
paid in cash at closing unless the total purchase price is in excess of
$_______________ in which event the purchase price shall be paid in __________
(____) equal quarterly installments beginning with the date of closing. The
installment amounts shall be computed by applying the following interest factor to the
principal amount: interest compounded quarterly at the Quarterly Federal Short-Term
Rate existing at closing under the Applicable Federal Rates used for purposes of
Internal Revenue Code § 1 274(d), or any successor provision.
(b) To the extent the PLLC does not buy the offered interest of the selling Member, the
other Members shall have the option to buy the offered interest at the Set Price on a
pro rata basis based on the Members' percentage interests at that time. If Member
does not desire to buy up to his/her proportional part, the other Members can buy the
remaining interest on the same pro rata basis. Members shall have fifteen (15) days
from the date the PLLC gives its written notice to the selling Member to give the
selling Member notice in writing of their intention to buy all, some, or none of the
offered interest. Closing on the sales shall occur within sixty (60) days from the date
that the Members give written notice of their intention to buy. The purchase price
from each purchasing Member shall be paid in cash at closing.
(c) To the extent the PLLC or the Members do not buy the offered interest, the selling
Member can then assign the interest to a non-member who is duly licensed by the
Sate of New York to practice ______________. The selling Member must close on
the assignment within ninety (90) days of the date that he gave notice to the PLLC. If
he does not close by that time, he must again give the notice and options to the PLLC
and the PLLC Members before he sells the interest.
(d) The selling Member must close on the assignment within ninety (90) days of the date that he gave notice to the PLLC. If he does not close by that time, he must aga in give
the notice and options to the PLLC and the PLLC Members before he sells the
interest.
(e) A non-member purchaser of a member’s interest cannot exercise any rights of a Member unless a majority of the non-selling Members consent to him becoming a
Member. The non-member purchaser will be entitled, however, to share in such
profits and losses, to receive such distributions, and to receive such allocation of
income, gain, loss, deduction, credit or similar items to which the selling membe r
would be entitled, to the extent of the interest assigned, and will be subject t o calls for
contributions under the terms of this Agreement. The purchaser, by purchasing the
selling member’s interest, agrees to be subject to all the terms of this Agreement as if
he were a Member.
33. Set Price. The Set Price for purposes of this Agreement shall be the price fixed by conse nt of
a majority of the Members. The Set Price shall be memorialized and made a part of the
PLLC records. The initial Set Price for each Member's interest is the amount of t he
Member's contribution(s) to the PLLC as provided above, as updated in accordance with the
terms hereof. Any future changes in the Set Price by the Members shall be based upon net
equity in the assets of the PLLC (fair market value of the assets less outstanding
indebtedness), considering the most recent appraisal obtained by the PLLC for its assets, as
may be adjusted by the Members in their discretion. The initial Set Price shall be adjusted
upon demand by a Member but not more than once a year unless all Members consent. This
basis for determining the Set Price shall remain in effect until changed by consent of a
majority of the Members. The Members will consider revising the basis for determining the
Set Price at least annually.
ARTICLE IX
OBLIGATION TO SELL ON A DISSOCIATION EVENT CONCERNING A MEMBER
34. Dissociation. Except as otherwise provided, upon the occurrence of a dissociation event with
respect to a Member, the PLLC and the remaining Members shall have the option t o purchase
the dissociated Member's interest at the Set Price in the same manner as provide d in
ARTICLE VIII and as if the dissociated Member had notified the PLLC of his desire t o sell
all of his PLLC interest. The date the PLLC received the notice as provided in ARTICLE
VIII triggering the options shall be deemed to be the date that the PLLC receive s actual
notice of the dissociation event.
ARTICLE X
DISSOLUTION
35. Termination of PLLC. The PLLC will be dissolved and its affairs must be wound up only
upon the written consent of a majority of the Members.
36. Final Distributions. Upon the winding up of the PLLC, the assets must be distributed as
follows: (a) to the PLLC creditors; (b) to Members in satisfaction of liabilities for
distributions; and (c) to Members first for the return of their contributions and secondly
respecting their PLLC interest, in the proportions in which the Members share in profit s and
losses.
ARTICLE XI
TAX MATTERS
37. Capital Accounts. Capital accounts shall be maintained consistent with Internal Revenue
Code § 704 and the regulations thereunder.
38. Partnership Election. The Members elect that the PLLC be taxed as a partne rship and not as
an association taxable as a corporation.
ARTICLE XII
RECORDS AND INFORMATION
39. Records and Inspection. The PLLC shall maintain at its place of business the C ertificate of
Formation, any amendments thereto, this Agreement, and all other PLLC records required to
be kept by the Act, and the same shall be subject to inspection and copying at the reasonable
request, and the expense, of any Member.
40. Obtaining Additional Information. Subject to reasonable standards, each Member may
obtain from the PLLC from time to time upon reasonable demand for any purpose reasonably
related to the Member's interest as a Member in the PLLC: (1) information regarding t he
state of the business and financial condition of the PLLC; (2) promptly after becoming
available, a copy of the PLLC's federal, state, and local income tax returns for e ach year; and
(3) other information regarding the affairs of the PLLC as is just and reasonable.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
41. Amendment. Except as otherwise provided in this Agreement, any amendment to this
Agreement may be proposed by a Member. Unless waived by the Members, the proposing
Member shall submit to the Members any such proposed amendment together with an
opinion of counsel as to the legality of such amendment and the recommendation of the
Member as to its adoption. A proposed amendment shall become effective at such tim e as it
has been approved in writing by a majority of the Members. This Agreement may not be
amended nor may any rights hereunder be waived except by an instrument in writing signed
by the party sought to be charged with such amendment or waiver, except as otherwise
provided in this Agreement.
42. Applicable Law. To the extent permitted by law, this Agreement shall be const rued in
accordance with and governed by the laws of the State of New York.
43. Pronouns, Etc. References to a Member or Manager, including by use of a pronoun, shall be
deemed to include masculine, feminine, singular, plural, individuals, partnerships or
corporations where applicable.
44. Counterparts. This instrument may be executed in any number of counterparts each of which
shall be considered an original.
45. Specific Performance. Each Member agrees with the other Members that the other Mem bers
would be irreparably damaged if any of the provisions of this Agreement are not performed
in accordance with their specific terms and that monetary damages would not provide an
adequate remedy in such event. Accordingly, it is agreed that, in addition to any other
remedy to which the nonbreaching Members may be entitled, at law or in equity, t he
nonbreaching Members shall be entitled to injunctive relief to prevent breaches of t his
Agreement and, specifically, to enforce the terms and provisions of this Agreement in any
action instituted in any court of the United States or any state thereof having subject matter
jurisdiction thereof.
46. Further Action. Each Member, upon the request of the PLLC, agrees to perform all further
acts and to execute, acknowledge and deliver any documents which may be necessary,
appropriate, or desirable to carry out the provisions of this Agreement.
47. Method of Notices. All written notices required or permitted by this Agreement shall be
hand delivered or sent by registered or certified mail, postage prepaid, addressed to the PLLC
at its place of business or to a Member as set forth on the Member's signature page of t his
Agreement (except that any Member may from time to time give notice changing hi s address
for that purpose), and shall be effective when personally delivered or, if mailed, on the date
set forth on the receipt of registered or certified mail.
48. Facsimiles. For purposes of this Agreement, any copy, facsimile, telecommunication or other
reliable reproduction of a writing, transmission or signature may be substituted or used in
lieu of the original writing, transmission or signature for any and all purposes for which the
original writing, transmission or signature could be used, provided that such copy, facsimile
telecommunication or other reproduction shall have been confirmed received by the sending
Party.
49. Computation of Time. In computing any period of time under this Agreement, the day of the
act, event or default from which the designated period of time begins to run shall not be
included. The last day of the period so computed shall be included, unless it is a Sa turday,
Sunday or legal holiday, in which event the period shall run until the end of the next day
which is not a Saturday, Sunday or legal holiday.
50. New York State Education Department Office of the Professions. The PLLC and its mem bers
and managers shall at all time be in full compliance with the rules and regulations of the
NYSEDOP.
51. Mandatory Insurance. The PLLC shall at all times be and remain in full compli ance with the
insurance requirements as established by the NYSEDOP, and other legal authorities.
WHEREFORE, the Parties have executed this Agreement on the dates stated below t heir
signatures on the attached signature page for each individual Party.
NOTICE: EACH MEMBER HEREBY CERTIFIES THAT HE OR SHE HAS RECEIVED A
COPY OF THIS OPERATING AGREEMENT AND FORMATION DOCUMENT OF _____________________________________________________________________________,
A NEW YORK PROFESSIONAL LIMITED LIABILITY COMPANY. EACH MEMBER
REALIZES THAT AN INVESTMENT IN THIS COMPANY IS SPECULATIVE AND
INVOLVES SUBSTANTIAL RISK. EACH MEMBER IS AWARE AND CONSENTS TO
THE FACT THAT THE INTERESTS IN THE COMPANY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR ANY SECURITIES ACT OF THE STATE OF
NEW YORK. EACH MEMBER AGREES TO BE BOUND BY ALL OF THE TERMS AND
CONDITIONS OF THIS AGREEMENT AND THE FORMATION CERTIFICATE OR
ARTICLES.
Members:
__________________________________
Name __________________________________
Name __________________________________
Name
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the Limited Liability
Company Agreement and Articles of Organization of
___________________________________________________, a New York professional limited liability company.
I realize that an investment in this Company is speculative and involves substa ntial risk. I agree to be bound by all
of the terms and conditions of the Articles of Organization and Limited Liability Company Agreement of
___________________________________________.
Member: ________________________________
Address:
________________________________
Date:
This page intentionally left blank.
Ownership Ledger
Name and Residence
Address of LLC Member Date of
Transfer % Ownership Amount Paid Subsequent
Transfer
Show on
separate line
Accessories
U.
