In New York one of the most common forms of entity for operating a business is a Limited Liability Company (commonly known as an LLC). Depending on the circumstances it may be an appropriate entity to choose when establishing a business or other undertaking in New York State. An LLC is often known as a hybrid. It combines the limited liability advantages of a company with the operational advantages of a partnership. For example, whereas in a company the management (directors) are separate from the owners (shareholders), in an LLC the roles are fused with the owners being "members". For tax purposes it is ordinarily treated as a partnership, although it may elect to be treated as a corporation. There are no restrictions on who may be the members, and therefore it can be an individual, corporation or even another LLC. The LLC's name must include the words "Limited Liability Company", "LLC" or "L.L.C".
In order to establish an LLC Articles of Organization are filed with the NYS Department of State ("DOS"). In addition, a written Operating Agreement is required. The Operating Agreement sets out the basis for the operation and governance of the LLC. The Operating Agreement is not filed with the DOS and remains a private document. Murray LLP can undertake all aspects of filing the Articles of Organization and preparation of the Operating Agreement.
One aspect of forming an LLC that is sometimes overlooked is the requirement to publish a notice in two newspapers in the County where the LLC is located for a period of six consecutive weeks. The County Clerk for the relevant County advises on the acceptable newspapers for making the publications. There is a prescribed form which the notices must meet and the publisher of the newspaper will provide affidavits of publication which must be filed with the DOS. If the LLC fails to carry out the publications or does not follow the prescribed form then its authority to carry on business in New York will be suspended.
The filing fee for the formation of the LLC to the DOS is $200 ($225 for express filing). In addition, upon completion of the publication requirements the affidavits of publication must be submitted to the DOS with a $50 fee.
Attorney advertising. There are other considerations when forming an LLC and this document does not serve as tax and/or legal advice. If you would like to receive legal advice on establishing a LLC in New York please contact us:
Anthony Murray
Murray LLP
(212) 729 3045
anthony@murrayllp.com
ABOUT THE AUTHOR:
Anthony Murray is a partner of Murray LLP, a law firm based in New York City providing commercial law advice with an emphasis on servicing the financial services sector and hedge funds. Anthony has fifteen years legal experience, commencing his career as a Lawyer in the UK in 1997. In 2000 he relocated to the Netherlands and was latterly appointed as Associate General Counsel for Europe for a large fund service organization and in 2010 moved to the U.S. and assumed the position of Associate General Counsel for the Americas. He has extensive experience of legal, finance and regulatory matters in many jurisdictions, including the Netherlands, United Kingdom, Ireland, Luxembourg, Switzerland, Guernsey, Jersey, The United States, Bermuda, The Bahamas, British Virgin Islands and the Cayman Islands. He became a partner of Murray LLP in 2012. He graduated with a Bachelor of Laws (LL.B (Honors)), First Class Honors and Post Graduate Diploma in Legal Practice from the University of Dundee, Scotland. Anthony Murray is qualified as a Solicitor in Scotland and admitted as an Attorney-at-Law in New York State. Contact Anthony Murray anthony@murrayllp.com (212) 729 3045
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
