NY LLC Law: Everything You Need to Know
You’ll want to learn all about NY LLC Law if you are thinking about forming your own New York Limited Liability Company. 3 min read
2. Articles of Organization
3. Operating Agreement
4. Tax Rules
5. Maintaining Your NY LLC
NY LLC Law
You’ll want to learn all about NY LLC Law if you are thinking about forming your own New York Limited Liability Company. In the State of New York, when forming an LLC, you are required to file two documents: the articles of organization and an operating agreement. Specifically, the articles of organization creates the actual LLC, whereas the operating agreement specifies the business operations of the LLC, i.e. members, decision-making process, etc.
Articles of Organization
Under New York Department of State Sections 203 & 209 NY LLC, those wanting to create an LLC are required to file articles of organization. Included in this document is:
• Business name
• Principal office location
• Additional address for mailing purposes (if different from the principal office location)
If at any time during the life of the business you wish to amend any of the above-mentioned information, you will need to file an amendment with the NY Secretary of State’s office.
While it is not required in all states, NY State does in fact require that LLCs file an operating agreement within 90 days after filing the articles of organization. The agreement is a document that binds the LLC to certain decision-making processes. More specifically, the purpose of the document is to establish the rights and responsibilities of the members. NY State is very flexible in how the LLC can be operated, so long as all members of the LLC mutually agree upon the operations of the business, i.e. loans, financial assistance, contracts, etc.
While New York State requires that the operating agreement be drafted, the law itself doesn’t specify what consequences are present if the agreement isn’t drafted. But keep in mind that even if your LLC doesn’t draft this agreement, then any potential lawsuits arising out of member disagreements will be subject to the default rules outlined by New York LLC law, which might not be what the members intended.
In all states, LLCs are not recognized as actual business entities, which means that the LLC doesn’t file as such on a federal tax return. Instead, the LLC will file as a corporation, partnership, or sole proprietorship for federal tax purposes.
With regard to NY State LLC tax rules, the LLC must obtain a state ID from the IRS, which will be used for state tax purposes. NY State charges additional taxes on LLCs filing as a partnership, including taxing income, gains, and losses.
NY LLCs are required to pay a fee based on the number of members, and multiplying that number by $50; however, there is a price floor and ceiling, at $315 and $10,000 respectively.
Those LLCs generating income in the State of New York must pay a yearly filing fee equivalent to the total number of members multiplied by $100. The minimum fee is $500, and maximum fee is $250,000. For those single-member LLCs, the annual fee is $100.
Maintaining Your NY LLC
In order to maintain your New York LLC, you must file a biennial statement (every two years) with the NY Department of State identifying the address where the Secretary of State can mail a copy of any requests or important notices. The statement will be mailed to you every two years when it is time to file, and will be mailed to the address on file with the Secretary of State.
Ongoing meetings aren’t required for LLCs, nor are you required to keep meeting minutes of such meetings if you do have them. However, it is still a good idea to keep track of any meetings that you do hold, along with what is discussed in those meetings, to prevent potential disputes among members.
For additional resources and legalities regarding New York LLCs, you can get more information at the New York State Legislature website.
If you need help forming your NY LLC, or if you want to learn more about NY LLC laws, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5-percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with, or on behalf of companies like Google, Menlo Ventures, and Airbnb.