A limited liability company (LLC) is a popular type of business entity because it pairs a corporation's limited liability protections with a partnership's flexibility. The legal requirements for establishing this business entity vary by state. To create and register one in New York, you must be a state resident or a business entity located in New York. You must also file articles of organization with the New York Department of State's office and meet additional legal obligations.
1. Choose an acceptable name.
First, you must choose a name that complies with New York's LLC law. Under that law, a new LLC's name may not already be in use and must be easily distinguishable from other existing businesses, including limited partnerships and corporations. It must contain the words "limited liability company" or the letters "LLC" or "L.L.C." Furthermore, there are some words or phrases you cannot use and others you can only use with state agency approval. For example, the state Department of Education must approve use of the word "academy," and the state Attorney General's office must approve "exchange." State law prohibits use of the words "cooperate" or "cooperative" for LLCs. You can submit a name availability inquiry to the Department of State (DOS) to determine whether your proposed name is available and acceptable. You may also want to file an Application for Reservation of Name to reserve your chosen name for your use while you are in the process of creating your company.
2. File articles of organization.
The articles of organization for your LLC contain basic information about your company, including its name and an address for receiving service of legal process. New York State mandates that every LLC designate its Secretary of State to be the company's registered agent for service of process. New York offers a fill-in-the-blank Articles of Organization form that you may submit by mail, by fax, or in person to the DOS, along with the prescribed fee. This fee is payable by cash, check, money order, or credit card. You can also submit your articles of organization online.
3. Publish notice in newspapers.
In addition to filing your articles of organization with the DOS, you must also publish them—or a notice about your company's formation that contains information exactly matching the information in the articles—in two newspapers designated by the clerk of the county where the business is located. You must publish this notice within 120 days of the date your articles of organization become effective, and it must run for six consecutive weeks. The newspapers will provide you with an affidavit of publication, which you must submit to the DOS together with a Certificate of Publication.
4. Prepare an operating agreement.
Under New York state law, all LLCs must have a written operating agreement establishing the members' rights, powers, duties, liabilities, and obligations, both among themselves and with respect to the company. Although you do not have to file the operating agreement with the DOS, it must be in place within 90 days after you have filed the articles of organization.
If you are ready to create your LLC, be sure you get it right the first time. Consult an experienced attorney for guidance in meeting all your chosen state's legal requirements for setting up a company.
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