New York Limited Liability Company (LLC)

Every New York Limited Liabilty Company formation includes a consultation to determine whether an LLC is right for you / your business (versus a corporation, limited liability partnership); what state to form the LLC; and to make sure that all your questions and concerns are addressed. Also included is perhaps the most important step in the LLC formation process: drafting an Operating Agreement customized to your needs and explaining its significance and operation to all of the LLC members.

Flat fee one-owner small business LLC formation services start at $1,000 inclusive of standard filing fees and costs. For this purpose, husbands and wives and legally-sanctioned domestic partners count as one owner. Multiple owner LLCs are generally $1,250 inclusive of standard filing fees and costs; however, in more complex situations, including where securities laws come into play, a higher flat rate or an hourly rate of $250 may apply for all - or for additional - work. Please contact me with information about your legal needs to receive a more detailed quote.

The standard LLC organization package includes the following:

• Unlimited legal advice and consultation regarding the LLC formation
• Name search and reservation
• Custom Articles of Organization
• Indemnification of managers/officers/directors/agents articles provisions if desired
• Custom operating agreement including basic buy-sell agreement provisions
• Custom organizational meeting minutes
• Transfer of currently owned assets into the LLC
• Filing of Statement of Information with Secretary of State
• Obtain Federal EIN number (taxpayer ID number)
• Obtain New York Certificate of Authority (If Needed)
• IRS Form 8823 or 2553 election by LLC to be taxed as a corporation if requested
• Advice and counsel on operating your LLC to maintain its limited liability status as a separate legal entity

The following are also available at additional cost:

• Advanced asset protection LLC
• Bound custom LLC record book
• New York registered agent service
• Corporate counsel program to ensure legal compliance, including unlimited preparation of LLC resolutions for one year and registered agent service
• Transfer of rental, investment, or commercial real estate into LLC
• Assignment of intellectual property rights to LLC
• Transfer of purchased ongoing business or assets into LLC

A New York LLC organization is generally about a four-week process from retaining the firm until you have an EIN number in hand, ready to open a bank account.

Need a New York LLC fast? Rush (approximately two week turnaround) and expedited service (less than one week total) is available; additional filing and legal fees of $250 and $750 respectively apply.

About LLCs

A limited liability company ("LLC"), sometimes mistakenly called a limited liability corporation, is often referred to as a "new" type of business entity. The LLC, while relatively new in comparison to the business corporation, is now well established, commonly used, and available in all 50 U.S. states (although it is still true that the case law is more well developed for corporations). The LLC is a hybrid entity combining characteristics of a corporation with those of a general partnership. LLCs have limited liability protection (which general partnerships lack) and passthrough tax treatment (unlike C corporations subject to double taxation). Single-member LLCs are now permitted in all 50 U.S. states. The owners of an LLC are called members, and they either manage the LLC's business themselves, or hire managers to handle these duties.

Federal & New York Taxation of LLCs: While corporate taxation may be elected for specific reasons after consultation with an accountant, the LLC is generally taxed on the federal level as a pass-through entity, which means that profits and losses after business expenses pass through to personal tax returns of the members, by way of IRS Schedule K-1 profit/loss distributions issued to each member. Single-member LLCs are disregarded for federal tax purposes, meaning that the profits/losses of one-owner LLCs are reported on IRS Form 1040 Schedule C, just as a sole proprietor would report income. In New York, all LLCs are subject to an annual franchise tax.

Advantages / Disadvantages of LLCs: LLCs are often chosen over corporations because they provide the flexibility inherent in a partnership (for example, profits and losses can be allocated among members without regard to their ownership percentages); can usually select how to be taxed; are easy to maintain (generally no annual meeting or other formalities are required); and provide excellent limited liability protection for members. Disadvantages of LLCs versus corporations include less settled case law due to the newness of LLCs versus corporations; greater formation costs if unusual operating agreement provisions are required; and potentially greater federal and New York taxes when compared to corporations. Finally, New York does not permit some business types to be operated as LLCs.

When considering whether an LLC is right for you, an attorney will likely also consider alternatives to organizing a New York LLC, such as a S corporation, C corporation, limited liability partnership, limited partnership, and Delaware or Nevada LLC, depending on the circumstances.

In sum, the LLC is a useful entity, and the right choice for many entrepreneurs, small businesses, real estate investors, and music, TV, and film projects, but the all too common knee-jerk "I need an LLC" or "I'm starting a business so I'm going to form an LLC online" approach will many times result in the selection of an LLC when another entity, or an LLC formed in the most advantageous jurisdiction, may well have been less expensive in the near or long term (or both) and/or better suited to the client's individual business needs for non-tax related reasons.

Maintenance and Annual Meetings - Starting at $250; inquire for details. Note that, unlike a corporation, unless otherwise specified in the operating agreement, LLCs are not required to hold an annual meeting of the members (however, it may be a good idea in LLCs with more than one member or that are managed by a manager or managing member).

LLC Dissolutions - Dissolve your inactive or suspended New York LLC, starting at a flat fee of $250 for LLCs in good standing with the state; inquire for details to determine if this rate applies to your entity. Cancellation or revival (restoring to good standing) of suspended LLCs is generally handled on an hourly rate basis. Other alternatives include selling the LLC and its business if a buyer can be found (with an appropriate attorney-drafted custom sales agreement that complies with applicable law); repurposing the LLC to a new venture; or, when it is determined an LLC no longer is - or never was - the best entity type for your business, the LLC can be converted to a corporation, or dissolved and a corporation formed to operate the business.

LLC Conversion: Your New York LLC can be converted to a New York corporation or other entity. Hourly rates apply and because of potential tax implications, tax advice is always recommended when considering such action.

Initial consultation via email or telephone is always without charge or obligation. All LLC organization services may be handled entirely online, or by phone.