What this form is for
This form establishes the internal governance structure and ownership rules for your New York limited liability company. You'll complete this after forming your LLC with the state but before opening business bank accounts or applying for commercial credit.
Before you start
- Your LLC's exact legal name as filed with the New York Department of State and your filing date
- Full legal names, addresses, and ownership percentages for all members
- Each member's initial capital contribution amount (cash, property, or services with assigned dollar values)
- Your LLC's principal business address in New York and your registered agent information
- Federal Employer Identification Number (EIN) from the IRS
Step-by-step
1. Fill in the LLC name, formation date, and principal office address exactly as they appear on your New York Articles of Organization.
2. Complete the members section by listing each owner's name, address, percentage interest, and initial capital contribution. These percentages must total exactly 100 percent.
3. Define management structure by confirming member-managed status and specify voting rights. In New York, unless you state otherwise, votes are proportional to ownership percentages.
4. Document capital contribution details including the form of contribution (cash, equipment, intellectual property) and the agreed-upon valuation for non-cash contributions.
5. Establish profit and loss allocation percentages for each member. These often match ownership percentages but don't have to—specify if different.
6. Set the fiscal year end date and accounting method (cash or accrual). Most small businesses choose calendar year and cash method.
7. Complete transfer restrictions explaining whether members need consent to sell their interests. New York law allows you to restrict transfers to maintain control.
8. Add dissolution and buyout provisions describing what happens if a member leaves, dies, or becomes incapacitated.
9. Include any New York-specific clauses regarding publication requirements if your county requires it, though most New York counties outside New York City have eliminated this.
10. Have all members sign and date in the presence of a notary. New York doesn't require notarization for operating agreements, but banks usually prefer it.
What lenders look for
- Banks examine ownership percentages and capital contributions to verify each member has real financial commitment. Zero-dollar contributions or lopsided ownership without clear explanation raises red flags about the business's legitimacy.
- Underwriters look for clear buyout and succession language because they need assurance the business can continue if a key member exits. Vague or missing dissolution terms can delay loan approval.
- Keep your operating agreement current. If ownership changes but your agreement shows outdated members, lenders question whether you're organized enough to manage debt responsibly.