Getting a business idea down in writing is a big step to take for those wanting to start a business in New York. However, this is only just the beginning of the process. Once a business plan is in place, the business needs to be legally formed.
But before you can move forward with the business formation process, the type of business you want to form needs to be established. For many, the benefits of an LLC make it the best choice for them.
Benefits of an LLC
For those seeking to start a Limited Liability Company or LLC in New York, it is important to understand the process, what documents need to be drafted and filed and whether there are any annual obligations.
An LLC is often ideal for owners, as it limits the personal liabilities the member could face with regards to the liabilities of the business. An LLC is essentially a hybrid, as it combines corporation-style limited liability with the flexibility of a partnership. In other words, it allows for a flexible management structure in order to shape the LLC to meet the needs of the business while also protecting the members from personal liability for the business’s debts.
Forming an LLC
In order to form an LLC, the owners must file Articles of Organization. These must be completed and filed in accordance with Section 203 of the New York State Limited Liability Company Law.
There are other considerations that need to be addressed during formation. For instance, the name of the LLC. Not only does the name need to be available, it must also include LLC in the name. In order to complete the filing, the Articles of Organization should be filed with the filing fee of $200.
It should eb noted that the members of an LLC are required to adopt a written Operating Agreement and must be entered into within 90 days after filing the Articles of Organization. There are also requirements of publishing the formation and filing statements, so it is imperative to understand these requirements.
Forming an LLC is an exciting time, butit is also a time to take careful consideration of your business needs.