LIMITED LIABILITY COMPANIES
Limited Liability Company
An LLC is an unincorporated business organization of one or more persons who have limited liability for the contractual obligations and other liabilities of the business. The Limited Liability Company Law
governs the formation and operation of an LLC. An LLC may organize for any lawful business purpose or purposes.
The New York State Limitd Liability Company Law governs LLC's. Members have limited personal liability for the debts and actions of the business, combining the advantage of a corporate structure with the management flexibility and benefit of pass-through taxation advantages of a partnership.
Owners of an LLC are called members. In New York State, an LLC is formed when the organizers file Articles of Organization with the Departnemt of State. The New York State Limited Liability Company Law requires the adoption of a written operating agreement and the publication of a notice related to the formation of the LLC.
Features of LLCs:
- Personal liability is generally limited, although the articles of organization can specify that member(s) will be liable for company debts.
- The life-span of the business may be for a designated period stipulated in the articles of organization; or until a dissolution event occurs and the company takes no action to continue.
- For purposes of taxation, an LLC can elect its classification for federal tax purposes. An LLC with two or more members can elect to be an association (corporation) or a partnership; an LLC with one member can elect to be an association (corporation) or elect to be disregarded as an entity separate from its owner, which means that the LLC would be treated as a sole proprietorship for federal tax purposes.
In New York, formation of an LLC requires filing the articles of organization, signed by one or more organizers, with the New York State Department of State. For more information about LLCs in New York State:
For more information about LLCs generally: