In forming a small business, it may be challenging to decide on the best formation option due to size and liability issues. A limited liability corporation offers the small business owner certain personal protections while avoiding the expense and complication of a corporation. This type of business entity is becoming a preferred form for many new business owners.
To form an LLC in New York, Articles of Organization must be filed in accordance with state laws. The Articles must be prepared and signed by those organizing the company. It is not necessary that the organizers be members of the LLC in question. Members are expected to create an operating agreement in written form. This must be established within 90 days of the Articles of Organization being filed. The operating agreement, however, is used for internal purposes and is not filed with the state. State law requires that the Articles of Organization be published for six weeks consecutively in two different newspapers. A certificate of publication, provided by the newspapers with affidavits that the information has been published, must be provided to the Department of State along with related fees. Without completion of this step within 120 days, an LLC may have its ability to conduct business suspended.
Because an LLC involves operating agreements that establish rights that can be enforced by law, it is important to be organized and thorough in establishing the documents and organization. Legal counsel may be advisable for those who are unsure of the implications of the decisions made during these business formation steps.
A business lawyer may be able to offer insight to a prospective business owner in the decision-making phase as an LLC is considered. An ongoing professional relationship with a business lawyer may be helpful in addressing issues such as taxes, employment matters and intellectual property protection.
Source: New York State Department of STate, “Forming a Limited Liability Company in New York“, September 19, 2014