A limited liability company, or LLC, is a common business structure with features of both corporations and partnerships. The owners of LLCs are members, not partners or shareholders, and as in corporations, they are generally not personally liable for the debts or obligations of the company. Since LLCs do not have to file taxes as a corporation, members can also report the company's losses and profits on their personal tax return, as in partnerships.
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Determine Name of Business
Organizers of an LLC in New York State can be a business or a person, and neither has to be a future member of the LLC. The first requirement of the organizers is to select a name for the company that meets the state's specific criteria. For instance, the name of every LLC must be different from the names of existing corporations, limited partnerships and LLCs in the state, and all LLC names must contain the terms "Limited Liability Company,” "LLC" or "L.L.C."
File Articles of Organization
After choosing an appropriate name, LLC organizers must file a signed document called the Articles of Organization with New York's Department of State. The Articles of Organization notes the desired name of the LLC in three areas, and other required information includes the county where the LLC will be based, the names and signatures of the LLC's organizers, the name and address of the person who filed the Articles of Organization, and an address for receiving relevant mail such as legal papers. The Department of State will not process the document until the organizers also pay a fee, which is $200 as of 2010.
Establish Operating Agreement
New York State requires all LLCs to create a document called an Operating Agreement no later than 90 days after submission of the Articles of Organization. The LLC does not have to file the agreement with the Department of State, however, because it is considered an internal document. The Operating Agreement must state the duties, liabilities, obligations, powers and rights of each member of the LLC in relation to both the company and other members, and all of the members of the LLC must agree to adopt its terms.
Announce Formation of LLC
Once an LLC is formed or authorized to conduct business in New York, the members must pay one daily newspaper and one weekly newspaper to publish a notice announcing the LLC's formation to the public. The notice must run once a week for six straight weeks, and the county clerk in the county where the LLC is located decides which newspapers must publish the notice. Both newspapers give the LLC an Affidavit of Publication, which the members must file with the Department of State, along with a $50 fee as of 2010. Failing to file the Affidavits of Publication within 120 days of the LLC's authorization or formation can lead to suspension of the LLC's authorization to conduct business.