Creating an LLC: What You Should Keep in Mind
The Limited Liability Company (LLC) is a business entity choice for entrepreneurs and established business owners in the United States3 min read
The Limited Liability Company (LLC) is a business entity choice for entrepreneurs and established business owners in the United States. An LLC is created to protect the owners from personal liability for any debts or lawsuits against the company, as well as tax benefits and asset protection. For entrepreneurs and business owners in New York, understanding and complying with the state’s codes and regulations is key when creating an LLC. Here are the top five things to keep in mind when creating an LLC in the state of New York.
Pick the Right Business Structure
Before registering an LLC, you’ll need to decide which structure best fits your business. Is your business a single-member LLC, a partnership, a nonprofit, or an S Corporation? Each structure offers its own advantages, such as greater tax savings or liability protection, and you’ll want to make sure you pick the right one. In addition, you’ll want to make a plan for how to raise capital for your LLC. Finding ways to fund your business’s needs without compromising the company’s assets is a crucial element of making sure your business remains successful.
Name Your LLC Appropriately
Choosing your LLC’s name is an important step. The name you choose must include the words “limited” or “limited liability company,” but you’ll also want to keep it as unique and catchy as possible. Run a business name search to make sure the name you’ve chosen isn’t already taken or too similar to someone else’s. Register your LLC’s name with your state’s secretary of state, and make sure that you’re also in compliance with the rules and regulations of your city or county’s name registry.
File the Right Paperwork
In New York, you’ll need to file a Certificate of Organization with the state to form your LLC. This is an important document that outlines the LLC’s purpose, ownership structure, duration of existence, and contact information for your LLC. Include information about each member’s individual responsibility in relation to the company, and make sure to review the filing requirements to ensure that your documents are properly filled out.
Create an Operating Agreement
You’ll also need to create an Operating Agreement for your LLC. This legally binding document outlines the rights and responsibilities of each LLC member and should include the company’s management structure, ownership percentages, financing arrangements, voting powers, and more. The agreement should be signed by all the members and filed with the state.
Understand the Regulations
Most state and local regulations apply to LLCs, and you’ll want to make sure you’re familiar with them. You may need to register your business for certain licenses and permits, or you may need to pay taxes or fees. A business attorney can help you understand the regulations and find solutions to any problems you may encounter.
Creating an LLC in the state of New York can be complicated and time consuming, so it’s important that you understand what you need to do in order to ensure that your new business is compliant. With the right structure, paperwork, operating agreement, and knowledge of the state and local regulations, you can create an LLC that allows you to benefit from the tax savings and limited liability protection offered by this business structure.
Topics:
