A New York LLC establishes a legal presence within the state, accordingly meets an initial condition necessary before legal operations can commence for the New York LLC. Once that a New York LLC formation documents have been ratified by the state, the New York LLC will then qualify for all the privileges and protections afforded under New York State law. A major consideratiobn amongst the protections sought by business developers is that the New York LLC and its future actions and liabilities be kept separate from the personal assets (bank deposits, securities, real property, etc.) of your New York llc members. Unless an instance of fraud has been proven in a court with jurisdiction, any ruling against your New York llc is limited to the capital and assets of the New York LLC, and no judgment can be extended to personal assets.
Should I form a New York LLC?
An New York LLC satisfies a necessary condition of your business planning developement in that it meets the requirement that you establish a legal form of organization in order to gain the statutory benefits and protection available in New York to your LLC. Your New York LLC establishes a legal presence within the state, which you can use either as a platform for in-state operations or by registering your New York LLC via your agent's physical address in order to meet the purely statutory requirement for tax and filing purposes absent an in state operation.
Advantages and Disadvantages of a New York LLC
Advantages of LLC
Limited Liability: Owners of a LLC have the limited liability protection of a corporation.
Flexible Profit Distribution: Limited liability companies can select varying forms of distribution of profits. Unlike a common partnership where the split is 50-50, LLC have much more flexibility.
No Minutes: Corporations are required to keep formal minutes, have meetings, and record resolutions. The LLC business structure requires no corporate minutes or resolutions and is easier to operate.
Flow Through Taxation: All your business losses, profits, and expenses flow through the company to the individual members. You avoid the double taxation of paying corporate tax and individual tax. Usually, this will be a tax advantage, but circumstances can favor a corporate tax structure.
Disadvantages of LLC
Limited Life: Corporations can live forever, whereas a LLC is dissolved when a member dies or undergoes bankruptcy.
Going Public: Business owners with plans to take their company public, or issuing employee shares in the future, may be best served by choosing a corporate business structure.
Added Complexity: Running a sole-proprietorship or partnership will have less paperwork and complexity. A LLC may federally be classified as a sole-proprietorship, partnership, or corporation for tax purposes. Classification can be selected or a default may apply.
By New York and other state law in order to proceed with forming a llc, you need to prepare a written abstract detailing
your llc purpose, the names of your initial New York LLC members, the name and address of your New York registered agent,
the details of which will be introduced into the body of your LLC operating agreement and related New York LLC formation documents assembled for application to the state of New York.
New York's 2008 Business Tax Climate Ranks 48th
New York ranks 47th in the nations State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Pennsylvania (27th), New Jersey (49th), Connecticut (38th) and Vermont (44th).