5 Things to Consider When Creating an LLC in New York
Beginning a business in New York can be an exhilarating and rewarding process3 min read
Beginning a business in New York can be an exhilarating and rewarding process. An LLC or Limited Liability Company gives you the flexibility and protection you need to grow your enterprise confidently. However, in order to reap the full benefits of an LLC, there are essential aspects of New York corporate law that must be adhered to. It can be intimidating making sure you establish your LLC properly and in compliance with local regulations. Continue reading to gain insight on the five key considerations that you should make when forming an LLC in New York.
Choose and register your business name
One of the exciting first steps when creating an LLC is to select a name. Many entrepreneurs like to incorporate business ideas, values, or geographic symbols into the name, but that may not be feasible in New York. One thing to note is that the name you choose for your LLC cannot be the same or closely resemble a pre-existing business entity or trademarked name. This is why it can be beneficial to partner with a knowledgeable business attorney to review the name you’ve chosen before registering it with the New York Department of State.
Select business organizational structure
When creating the foundation for your LLC, you’ll be required to decide how your LLC will be managed. For instance, members may choose to establish a member-managed LLC, where the members themselves are responsible for day-to-day operations. This is common in a smaller New York LLC. The alternative option to a member-managed LLC is a manager-managed LLC where the LLC appoints a specific individual or group of individuals to manage day-to-day operations. For business owners with multiple LLCs, this option can be advantageous.
Decide on the number of members in the LLC
When creating an LLC, it is important to confirm the amount of members included in the membership. In New York, one individual is allowed to own the entire LLC as a single member. Alternatively, a group of individuals may decide to own and operate the LLC as multiple members. It is recommended that all members and their respective ownership percentages are carefully documented in a written operating agreement.
Create an operating agreement
Forming an LLC in New York requires that the business owners create an operating agreement. This document serves to outline the membership percentage of each LLC owner, list the rules related to managing the business, and provide instructions on how decisions and disputes will be handled. As the regulations surrounding LLCs in New York are complex, it is important to ensure that this document is crafted professionally and in compliance with New York corporate regulations. This is one facet of prospectively forming an LLC where UpCounsel’s network of experienced attorneys can provide valuable guidance.
File articles of organization
In order to declare the LLC’s existence, prospective business owners must file Articles of Organization with the New York Department of State. Depending on the nature of the LLC, the Articles of Organization vary in form and content. Again, attorneys in UpCounsel’s network have experience to easily create these necessary filings.
Establishing an LLC in New York can be a detailed and intimidating process. While forming an LLC could be seen as simple and straightforward, the regulations in place to") guard business owners make this endeavor more complex. This is why it is important to be aware of the five key considerations when creating an LLC in New York. If you are unsure of how to proceed or don’t know if you’re adhering to all necessary regulations, UpCounsel’s network of experienced lawyers can provide you will the necessary guidance.