New York LLC Operating Agreement

New York LLC Laws and Definition

New York's Limited Liability Company Law defines an operating agreement as a written agreement of the members. It covers the business of the company and how its affairs are run.^[1] Section 417 adds that the members must adopt a written operating agreement.^[2]

"Operating agreement" means any written agreement of the members concerning the business of a limited liability company and the conduct of its affairs and complying with section four hundred seventeen of this chapter.

The definition has three parts. The agreement must be written, it must be made by the members, and it must comply with Section 417.

Section 417 says the members of an LLC must adopt a written operating agreement. It may contain any provisions that are not inconsistent with law or with the company's articles of organization. Those provisions relate to the following.^[2]

• The business of the limited liability company.
• The conduct of its affairs.
• The rights, powers, preferences, limitations or responsibilities of its members, managers, employees and agents.

Timing and Effective Date of a New York Operating Agreement

New York lets the members choose when to enter into the operating agreement. It may be entered into before, at the time of, or within ninety days after the filing of the articles of organization.^[2] The date it is entered into does not decide when it takes effect.

The agreement may take effect when the LLC is formed. It may instead take effect at a later time or date that the agreement itself provides.^[2] The articles themselves are filed separately, and FormsPal has a general articles of organization form for reference.

Limiting Manager Liability in a New York Operating Agreement

A New York operating agreement may eliminate or limit the personal liability of managers to the LLC or its members for damages for breach of duty. The statute sets limits. The agreement cannot remove a manager's liability when a final adjudication establishes bad faith, intentional misconduct, a knowing violation of law, or an improper personal gain.^[2]

Section 417 names two kinds of liability that a provision in the agreement cannot eliminate or limit.

• The liability of any manager when a judgment or other final adjudication against that manager establishes bad faith, intentional misconduct, or a knowing violation of law. The same applies when it establishes that the manager personally gained a financial profit or other advantage the manager was not legally entitled to. It also applies when the manager's acts on a distribution under Section 508(a) did not follow Section 409.
• The liability of any manager for an act or omission before the provision was adopted.^[2]

Amending a New York Operating Agreement

Unless the operating agreement or the articles of organization provide otherwise, a New York operating agreement cannot be amended without the written consent of each member adversely affected.^[2] Some provisions in the articles of organization are protected in the same way.

The protected provisions concern contributions, tax allocations and distributions. Without that written consent, no amendment may do any of the following.^[2]

• Increase the obligations of any member to make contributions.
• Alter the allocation for tax purposes of any items of income, gain, loss, deduction or credit.
• Alter the manner of computing the distributions of any member.
• Allow the obligation of a member to make a contribution to be compromised by consent of less than all the members.

It is a good habit to keep each member's written consent together with the agreement. Owners who plan ahead also tend to review their business strategy at the same time. A business plan template can help with that.

How to Fill Out the New York LLC Operating Agreement Form

Our New York form is a single-member operating agreement. Fill it in with the builder above, then print it and sign it. Work through the parts below in the order they appear on the form. Each step names a part of the form and says what goes in it.

1. Opening paragraphs. Enter the LLC's name, the state, and the date of the agreement. Add the sole member's name after the words "executed by." The form prints the year 2021 after the date line, so check that it reads right.
2. Formation paragraph. Enter the state, the date the articles of organization were filed, and the LLC statute reference on the line marked Act.
3. Sections 1 to 3. Enter the company name again, the principal business office address, and the name and address of the registered agent.
4. Section 6, Purposes. Select one box. Either describe the business on the line or choose All matters permitted by applicable law.
5. Section 8, Managers. Enter the initial number of Managers in Section 8(a) on page 2. In Section 8(g), on pages 3 and 4, select one of the two compensation boxes.
6. Section 9, Officers. Select whether the company has no Officers or has Officers. If you pick the second, write each Officer's role where the form asks.
7. Section 15, Fiscal Year. Enter the date the fiscal year starts and the date it ends.
8. Section 30, Effectiveness. Enter the date the entity was legally formed. It should match the filing date from step 2.
9. Signature block. The Member signs on the By line, then prints the name and title. Sign only after every blank above is filled in. The form has no notary, witness or initials lines.
10. Schedule A, Definitions. Enter the date the entity was legally formed in the Articles of Organization definition.
11. Schedule B, Member, Managers and Officers. List the Member's name and address, for example Anna Baker, 123 Main Street, Austin TX 78701. Then list the initial Managers and the initial Officers, up to six of each.
12. Schedule C, Initial capital contribution. Describe what the Member contributed to the company on the Insert Description line.

Keep a signed copy with your company records. If the company will hire staff, a New York non-compete agreement is another document owners often prepare. The LLC operating agreement template page lists forms for other states.

Under N.Y. Ltd. Liab. Co. Law § 204, the LLC name must contain the words "Limited Liability Company" or the abbreviation "L.L.C." or "LLC", and it must be distinguishable from the names of other LLCs and corporations on the Department of State's index.^[3]

Under N.Y. Ltd. Liab. Co. Law § 301, the Secretary of State is the agent for service of process of every New York LLC, which means legal papers against the LLC may be served on it, and the articles of organization must designate the Secretary of State as that agent.^[4]

Frequently Asked Questions

An LLC's operating agreement in New York is governed by Sections 102 and 417 of the Limited Liability Company Law. Section 102 defines it.^[1] Section 417 requires the members to adopt it in writing.^[2]

Can an LLC operate without an operating agreement?

Section 417 says the members of a New York LLC must adopt a written operating agreement. It may be entered into before, at the time of, or within ninety days after the filing of the articles of organization.^[2]

Does a single-member LLC need an operating agreement?

Section 417 speaks of the members of a limited liability company without separating out single-member companies. The written operating agreement it requires covers the following.

• The business of the company.
• The conduct of its affairs.^[2]

Our form is written for an LLC with one member, who signs as the Member. If you will share ownership with others, the multi-member operating agreement above is the better fit.

What is an operating agreement? Do I need one for my LLC?

An operating agreement is any written agreement of the members concerning the business of the LLC and the conduct of its affairs. It must comply with Section 417, which also reaches the rights, powers and responsibilities of members, managers and agents.^[1] Section 417 says the members must adopt a written operating agreement, so the statute calls for one.^[2]

Other New York Forms
Need other New York documents? We offer free forms and simple customization experience to everyone who wishes for having fewer to none troubles when facing papers.

New York Last Will New York Living Will New York Small Estate Affidavit New York Bill of Sale New York Power of Attorney New York Rental Lease Agreement New York Eviction Notice New York Promissory Note New York Non-compete Agreement New York Prenuptial Agreement New York Marital Settlement (Divorce) Agreement

General information, not legal or tax advice.

Sources

Unless noted otherwise, the sources below are from the N.Y. Ltd. Liab. Co. Law.

1. N.Y. Ltd. Liab. Co. Law § 102.
2. N.Y. Ltd. Liab. Co. Law § 417.
3. N.Y. Ltd. Liab. Co. Law § 204.
4. N.Y. Ltd. Liab. Co. Law § 301.

Jennifer M. Settles

Author & Attorney

With over 25 years of experience as a business and transactional attorney, Jennifer has mastered the craft of closing highly successful deals for her clients. Through her wide-ranging expertise in commercial contracts, real estate transactions, M&A and corporate law, Jennifer secures results that are second-to-none.