What laws to keep in mind before you start your LLC (Part 1)

The process of starting an LLC in New York is governed primarily by Chapter 34 of New York State Limited Liability Company (“LLC”) Law. The laws in this section are both detailed and ambiguous at the same time, and it’s a good idea to consult with a professional before taking on next steps. Here are the most relevant laws that may affect your business:

Section 201 of Article 2, Chapter 34 says your LLC must have a “lawful business purpose.” What you indicate to the state as your LLC’s lawful business purpose can affect how you’re able to dissolve your LLC in the future if that happens.

Section 203 of Article 2, Chapter 34 says your LLC must establish the county in New York where your LLC’s main office will be located. The county you pick as your company’s main office can affect the fees you have to pay for publishing notice about your LLC’s creation. The county you pick can also affect what local guidelines your company must follow when doing business.

Section 301 of Article 3, Chapter 34 says your LLC must designate someone as your agent of service. An agent of service is someone who receives on your behalf any legal complaint filed against your business. Generally, you can ask the Secretary of State of New York to serve as your agent of service, although finding a reliable individual is encouraged.

Section 401 of Article 4, Chapter 34 says the people who manage your LLC must be specified. You may want to manage your LLC yourself, or have a separate manager do it for you. Either way, the distinction between who is the owner and who is the manager must be made in your business operations.

Section 403 of Article 4, Chapter 34 is perhaps the most tricky for business owners. This section says your LLC must hold board meetings unless otherwise specified in your LLC’s operating agreement. For each meeting, you may have to give notice to each meeting attendee according to specific rules. At each meeting, you may have to make a recording of the agenda discussed and the votes taken.

There are many other laws to keep in mind when creating your LLC in New York. The full section of New York laws is found here, and it’s important to review these rules before you go forward.

If you’re thinking about starting your LLC, contact us for a free consultation to determine which laws may or may not affect your plans. We have years of experience helping business owners like you and can save you a lot of time and energy overcoming this hurdle.