Forming a New York Limited Liability Company
Forming a New York limited liability company is a simple process, and can be effected in minutes on-line using the New York Department of State’s website. However, there are some important things to be aware of in forming a New York LLC.
1) LLC’s are managed by Members or Managers, and the distinction is important. For instance, if you plan on admitting investors to the LLC who you wish to be silent partners, it is preferable to form an LLC which is Manager managed. However, if you do not specify in the Articles of Organization that the LLC is to be managed by Managers then, by default, the LLC will be member managed, and all your so-called silent partners will have voting rights (and thus they may not be so silent). It is therefore important to specify in the Articles of Organization how the LLC is to be managed.
2) By statute almost all New York limited liability companies are required to publish the fact of their formation in two newspapers for six consecutive weeks, and the ads must appear in the county specified in the Articles of Organization as the one where the LLC’s office is located. In specifying the county someone forming an LLC may not realize that the costs of advertising in New York county (which is Manhattan) are considerably higher than in one of the more rural counties (think $1,200 versus $100). Thus, it is important to be thoughtful when specifying the county.
The above is not to say that you should not try to form an LLC on your own. However it may be wise to consult with an attorney before doing so in order to make certain the Articles of Organization do not omit clauses you wish you had included, or contain information which is problematic.
If you would like to know more about forming limited liability companies or other business entities please contact Stephen Goldstein at Sgoldstein@sgoldlaw.com, or at (212) 586-5555.