LLC Member Obligations in an LLC Operating Agreement

These days, LLCs are often founded around a brilliant idea which requires a lot of development, creation and "sweat equity."  As a consequence, it is a good idea to include certain obligations of the LLC members in the LLC Operating Agreement. Confidentiality Each…

Management Provisions in an LLC Operating Agreement

Management provisions in the LLC Operating Agreement deal with the management of the LLC business, which basically means decision making for the LLC business. There are ordinary business decisions (think: buying copy paper at Staples, landing…

Ownership, Contributions and Distributions of Profit in an LLC Operating Agreement

The LLC Operating Agreement will have provisions stating what the LLC members have contributed upon formation of the LLC.  Contributions can be in the form of money, property or services.  While not a contribution per se, the Operating Agreement…

S-Corporations and the Old Low Salary Trick

Some people are in love with the s-corporation, because they think they can save a bunch on Medicare and Social Security tax (aka self-employment tax).  Here is how that "trick" goes: Working owners of "flow-through"…

New York LLCs and Privacy Concerns

Some people are very concerned about their privacy and don't want the public to be able to determine their ownership of a New York Limited Liability Company.  No worry, this can be arranged and nobody needs to know who is the owner of a New…

Sole Proprietorship or Single Member LLC?

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When you are a one person business, i.e. you are to be the only owner of your business, the question invariably arises:  sole proprietorship or single member LLC? You are a sole proprietorship, as soon as you begin doing business.  There…

How much does it cost to register an LLC in NY?

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Excluding any service fees paid to an attorney (see here for my very reasonable package), the approximate* costs are as follows: New York County (aka Manhattan): $1560 Kings County: $960 Nassau County:  $960 Richmond County:  $1010 Westchester…

The Claim: Multi-Member LLC is better than Single Member LLC Because of Charging Order

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Some people seem to suggest that it is always better to form a multi member LLC (more than one owner), rather than a single member LLC.  These people base their opinion on the fact that the so called charging order protection may not be…

NY LLC Operating Agreements: Confidentiality Obligations of Members

Several recent court cases remind us to include confidentiality obligations into each LLC Operating Agreement (see legalese commentary here and here).  You see, under New York law, executive LLC members, i.e. managers, have a duty to keep…

New York LLC Operating Agreements: Funding the Company

Another important part of an LLC Operating Agreement deals with the “capital” that comes into the LLC and with the corresponding percentage ownership rights of the individuals or entities providing such capital.   Capital…