A New York LLC operating agreement is a document that describes an LLC’s ownership and operations. It can include relevant details like members’ responsibilities and the process for removing and adding members.
After creating an LLC operating agreement every member agrees with, you don’t have to file it with any government office. Instead, you can have each member keep a copy in their records to reference later.
Is an LLC Operating Agreement Required in New York?
Yes, New York requires any LLC to adopt an operating agreement. Otherwise, the company can’t conduct its operations.
Chapter 34 of the Laws of New York contains legal guidelines regarding LLCs. The primary operating agreement statute is in § 417, and it explains the major provisions. For example, it states that while LLC members can enter into an operating agreement before they form the LLC’s articles of organization, the operating agreement can’t become effective until the company has officially formed.
Costs and Fees
Some of the costs and fees you can expect to pay to form and maintain your LLC include:
- $200 filing fee for your articles of organization (for a domestic LLC)
- $250 filing fee for your articles of organization (for a foreign LLC)
- $9 fee for the biennial report
- $50 filing fee for your LLC’s certificate of publication
- $25 fee to conduct business under another name
How to Form an LLC in New York
Use our easy-to-follow checklist below to form your LLC in New York:
Step 1 – Choose Your Name
You can choose a company name in accordance with New York’s rules. The name must be unique and can’t be the same as an existing business. As you research your company’s name, you can confirm whether your desired name exists by looking at New York’s business name database.
The name must also include Limited Liability Company, LLC, or L.L.C. The name also can’t contain words used to name government agencies. If you incorporate words with professional associations, like “bank” or “credit union,” you must have the appropriate license.
You may also reserve your name for up to 60 days by completing the Application of Reservation of Name form and submitting a $20 filing fee to the New York Department of State.
Step 2 – Appoint a Registered Agent
The New York Department of State is the registered agent for all LLCs. If you are sued, they will receive the papers serving you and forward the documents to you.
You can choose to appoint a registered agent as well. This can be yourself, another employee of your LLC, or a registered agent service.
If you use an individual as your registered agent or a registered agent service, they must have a physical address in New York. Your registered agent must be available to receive legal mail during business hours.
Step 3 – File Your Articles of Organization
The articles of organization are the most essential part of creating your LLC. This document is filed with the New York State Division of Corporations and contains pertinent information about your LLC. You can fill this out online or send it via mail.
The articles of organization should include the following information:
- The name of your LLC
- The New York County of the LLC
- An address in New York where the Secretary of State can mail legal documents for the LLC
- The name and signature of the LLC’s organizer
- The name, address, and signature of the person forming the LLC
Step 4 – Publish Your Articles of Organization
After your articles of organization receive approval, you must publish the news in two newspapers within 120 days after the articles of organization become effective.
The county clerk where the LLC resides will designate the newspapers where you should publish them. Once published, an affidavit and a certificate of publication must be submitted to the New York Department of State.
You’ll need to pay a publishing fee directly to the newspaper. The cost varies depending on your location and the publisher you choose. Once you publish the notice, you’ll need to request a certificate of publication from the New York Department of State and pay a $50 filing fee.
Step 5 – Create an LLC Operating Agreement
Within 90 days of filing your articles of organization, you must complete an operating agreement. Although you do not have to file this with the state, you still must adopt one.
When you have an operating agreement, the courts will decide based on what’s best for your LLC and its members. Otherwise, the courts will make decisions based on state laws. The operating agreement should include the following:
- The name and address of the LLC
- The duration of the LLC
- Dissolution procedures
- The purpose of the LLC
- Each member and their contribution
- Voting rights of the members
- How the LLC is divided among the members (e.g., profits, debts, etc.)
- Management of the LLC
Step 6 – Get an EIN
The IRS issues employer identification numbers (EINs). You can apply for these online. You’ll need an EIN if you hire employees and open a business bank account. It’s also necessary for filing taxes if your LLC has more than one company member.