A Limited Liability Company or LLC is a legal structure of ownership that is similar to corporation. It protects the owners from becoming personally liable to business debts. On the contrary, while operating a partnership or a sole proprietorship, it is your responsibility to deal with all your business debts. However, LLC is much easier to be set up and operate, as compared to a corporation. The three basic steps to form an LLC in New York are: an LLC for an online business
· Choosing name of your LLC: The business name that you choose cannot be same as name of any other business entity filed with the State Department. You can search the online database to find out whether the name you have chosen has been registered with any other business entity. As far as New York LLC is concerned, the name should contain abbreviations ‘L.L.C.’ or ‘LLC’ or words ‘Limited Liability Company’.
· Filing the formation documents: In New York, a formation documents is known as articles of organization and you need to prepare and file them with the State Department. These documents are required to contain the name of your LLC, its address, its purpose and name and address of the registered agent or agency.
· Publishing notice in the local newspaper: In New York, you are required to publish a notice in the local newspaper which states that you are intending to form a New York LLC. The newspaper will be able to help in filing the document.
Though it is not mandatory, you must create an operating agreement for the LLC, which will guide the owners to operate the business like a corporate bylaw, or partnership agreement. These documents are not needed to be submitted to the State Department. Finally, in order to gain the status of separate entity for your LLC, the members are required to observe some formalities like keeping a detail financial record and recording the minutes of meetings and major decisions.
While selecting the name of your LLC, you must keep the following things in mind:
Must contain the words LLC, L.L.C. or Limited Liability Company in the name
Should be different from any other LLC, foreign LLC or authorized name registered with the State Department
Must not have any prohibited words, phrases, abbreviations or derivatives
Should not contain following phrases such as board of trade, chamber of commerce, state police, state trooper, tenant relocation, community renewal, corporation, urban development, urban relocation, partnership or incorporated
Should not contain words such as acceptance, indemnity, guaranty, assurance, annuity, insurance, investment, attorney, bank, benefit, lawyer, mortgage, loan, doctor, trust or finance unless approved by the authorities
Should not contain words such as handicapped or blind, unless granted by social services of the state department
Should not contain the word ‘exchange’ unless approved
The best thing is to choose at least three names as preferred and conduct a search to see the files.
The articles of organization are required to be signed by 2 persons and delivered to the State Secretary. This information should include the name of the LLC, the duration of the LLC, its principal area of office or business, detail about the registered agent, detail about any LLC debts, liabilities and obligations and any other provisions such as purpose of the LLC and provisions laid in operating agreement.