How To Save Money When Forming An Llc In New York
Setting up a New York limited liability company
? Need to do so in the lowest-cost way that's feasible but still not stupid? No problem. The following three tricks can save you a bundle on attorney and accountant's fees:
Tip #1: Prepare the Articles of Organization Yourself
Probably the first (and biggest) money saver to consider is preparing the articles of organization yourself. Now, admittedly, this sounds crazy. Would you perform brain surgery on yourself? Well, of course not! And why, then, would you think of doing corporate legal stuff like an LLC formation yourself?!
The answer to this question is that preparing the limited liability company formation paperwork is absolutely not like brain surgery. The process is more like applying a band-aid.
The articles of organization which New York State requires are very simple to fill out (and available for free from the New York Secretary of State web site). You need to enter the name of the LLC a couple of places on the standard form. You need to identify the county where the LLC will operate. And you need to provide a contact person's name and address--someone who will act as the registered agent. And that's it. Really.
Just to make this point, the forms you use to file your taxes or apply for a credit card are far, far more complicated that the form you use to setup an LLC in New York. If you are literate, you can prepare the LLC articles in less than five minutes. Accordingly, while you don't have to prepare the form, you should certainly consider doing it yourself if you're interested in saving some dough.
Note: Preparing the one-page New York articles of organization will probably save you $200 to $1,000.
Tip #2: Use a Standard Limited Liability Company Operating Agreement
An LLC doesn't have corporate by-laws like a traditional corporation does. And an LLC doesn't use a partnership agreement like a partnership does. But an LLC does need (and in fact state law requires) an operating agreement to lay out how the entity is managed and how limited liability company members (or owners) deal with the LLC.
You may decide to have a good local lawyer write your LLC's operating agreement. But you can also often instead use or start from a standardized, boilerplate document and most everything you need.
In the case where you or your and spouse are the only owners, a simple operating agreement document (perhaps purchased off the Internet) may be a very reasonable option.
Note: A boilerplate LLC operating agreement will probably save you hundreds of dollars in attorney fees.
Tip #3: Be Your Own Registered Agent
A final money saving idea for New York limited liability companies: Be your own registered agent. In other words, agree to be the person that the state contacts and that other parties contact for "official " legal business.
To be your LLC's registered agent, you just give the New York Secretary of State your name. Typically, most years, you won't do anything in your role as the LLC's registered agent.
And in the odd year when you do have to do something because you're the "registered agent," probably all you'll really do is pass along a document (like a letter or notice) to the corporation's president (that's probably you anyway) or lawyer.
Note: By acting as your own registered agent, you'll save yourself between $100 and $200 a year. That's pretty good money for a job that doesn't usually require you to do anything.
by: Stephen Nelson
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