2006 New York Code - Formation.



 
    §  1203. Formation. (a) Notwithstanding the education law or any other
  provision of law, one or more professionals each of whom  is  authorized
  by law to render a professional service within the state, or one or more
  professionals,  at  least  one  of whom is authorized by law to render a
  professional service within the state, may form, or cause to be  formed,
  a  professional  service  limited liability company for pecuniary profit
  under this article for the purpose of rendering the professional service
  or services as such  professionals  are  authorized  to  practice.  With
  respect  to  a  professional service limited liability company formed to
  provide medical services as such services are defined in article 131  of
  the education law, each member of such limited liability company must be
  licensed  pursuant  to  article  131  of  the  education law to practice
  medicine in this state. With respect to a professional  service  limited
  liability company formed to provide dental services as such services are
  defined in article 133 of the education law, each member of such limited
  liability  company  must  be  licensed  pursuant  to  article 133 of the
  education law to practice dentistry in this state.  With  respect  to  a
  professional   service  limited  liability  company  formed  to  provide
  veterinary services as such services are defined in article 135  of  the
  education  law,  each  member  of such limited liability company must be
  licensed pursuant to article  135  of  the  education  law  to  practice
  veterinary  medicine  in  this  state.  With  respect  to a professional
  service  limited  liability  company  formed  to  provide   professional
  engineering,    land    surveying,    architectural   and/or   landscape
  architectural services as such services  are  defined  in  article  145,
  article  147  and  article 148 of the education law, each member of such
  limited liability company must be  licensed  pursuant  to  article  145,
  article  147  and/or article 148 of the education law to practice one or
  more of such professions in this state. With respect to  a  professional
  service  limited  liability  company formed to provide licensed clinical
  social work services as such services are defined in article 154 of  the
  education  law,  each  member of such limited liability company shall be
  licensed pursuant to article  154  of  the  education  law  to  practice
  licensed  clinical  social  work  in  this  state.  With  respect  to  a
  professional  service  limited  liability  company  formed  to   provide
  creative  arts  therapy services as such services are defined in article
  163 of the education law, each member of such limited liability  company
  must  be  licensed  pursuant  to  article  163  of  the education law to
  practice creative  arts  therapy  in  this  state.  With  respect  to  a
  professional   service  limited  liability  company  formed  to  provide
  marriage and family therapy services as such  services  are  defined  in
  article  163 of the education law, each member of such limited liability
  company must be licensed pursuant to article 163 of the education law to
  practice marriage and family therapy in this state. With  respect  to  a
  professional  service limited liability company formed to provide mental
  health counseling services as such services are defined in  article  163
  of the education law, each member of such limited liability company must
  be  licensed  pursuant  to  article 163 of the education law to practice
  mental health counseling in this state. With respect to  a  professional
  service  limited  liability  company  formed  to  provide psychoanalysis
  services as such services are defined in article 163  of  the  education
  law,  each  member  of  such  limited liability company must be licensed
  pursuant to article 163 of the education law to practice  psychoanalysis
  in   this   state.  In  addition  to  engaging  in  such  profession  or
  professions, a professional service limited liability company may engage
  in any other business or activities as  to  which  a  limited  liability
  company  may  be  formed  under section two hundred one of this chapter.
  Notwithstanding any other provision  of  this  section,  a  professional
  service  limited  liability  company  (i) authorized to practice law may
  only engage in another profession or  business  or  activities  or  (ii)
  which  is  engaged in a profession or other business or activities other
  than  law  may  only  engage  in  the practice of law, to the extent not
  prohibited by any other law of this state or any  rule  adopted  by  the
  appropriate  appellate  division  of  the  supreme court or the court of
  appeals.
    (b) The articles of organization of  a  professional  service  limited
  liability  company  shall  meet the requirements of this chapter and (i)
  shall state the profession  or  professions  to  be  practiced  by  such
  limited  liability  company and (A) the names and residence addresses of
  all individuals who are to be the  original  members  and  the  original
  managers,  if  any, of such limited liability company, and (B) the names
  and residence addresses  or,  if  none,  the  business  address  of  all
  shareholders, directors, officers, members, managers and partners of all
  professional   service   corporations,   foreign   professional  service
  corporations, professional service limited liability companies,  foreign
  professional  service  limited  liability  companies, registered limited
  liability partnerships,  foreign  limited  liability  partnerships,  and
  professional  partnerships  who  are  to  be  the  original  members  or
  managers, if any, who are individuals of such limited liability company,
  (ii) shall have attached thereto a certificate or certificates issued by
  the licensing authority or by the comparable authority of another  state
  certifying  that  each of the proposed members and managers, if any, who
  are individuals is authorized by law to practice a profession that  such
  limited   liability   company  is  being  formed  to  practice  and,  if
  applicable, that one or more  of  such  individuals  are  authorized  to
  practice  within  the  state each profession that such limited liability
  company will be authorized to  practice,  and  (iii)  if  such  proposed
  member  or  manager,  if  any,  is  a  professional service corporation,
  foreign professional service corporation, professional  service  limited
  liability   company,  foreign  professional  service  limited  liability
  company,  registered  limited  liability  partnership,  foreign  limited
  liability  partnership or professional partnership, (A) such certificate
  or certificates issued by the licensing authority or by  the  comparable
  authority  of  another state shall certify either (1) that each proposed
  member or manager is authorized by law to  practice  a  profession  that
  such  limited  liability  company  is  being  formed to practice and, if
  applicable, that each shareholder, member or partner  of  such  proposed
  member  or manager is authorized by law to render a professional service
  within the state or (2) that one or more of such  proposed  members  and
  one or more of such proposed managers, are authorized to practice within
  the  state  each  profession that such limited liability company will be
  authorized to practice and that one or more of the shareholders, members
  or partners of such proposed  members  or  managers  are  authorized  to
  practice  within  the  state each profession that such limited liability
  company will be authorized to practice within the state  and  (B)  there
  shall  be  attached  to the articles of organization of the professional
  service limited liability company a certificate by an authorized officer
  of the jurisdiction of  its  formation  that  the  professional  service
  corporation,  foreign  professional  service  corporation,  professional
  service limited liability company, foreign professional service  limited
  liability  company,  registered limited liability partnership or foreign
  limited liability partnership is validly existing and, in the case of  a
  foreign  professional  service corporation, foreign professional service
  limited liability company or foreign limited  liability  partnership,  a
  certificate  from  the secretary of state that such foreign professional
  service corporation,  foreign  professional  service  limited  liability
  company  or  foreign  limited  liability partnership is authorized to do
  business under article fifteen-A of the business corporation law,  under
  article  thirteen  of  this  chapter  or  under  article  eight-B of the
  partnership law, as the case may be.
    (c)  (1)  A certified copy of the articles of organization and of each
  amendment  thereto  and  restatement  thereof  shall  be  filed  by  the
  professional  service  limited  liability  company  with  the  licensing
  authority within thirty days after the filing  of  such  certificate  or
  amendment with the department of state.
    * (2)  Within one hundred twenty days after the filing of the articles
  of organization, a copy of the same or a notice containing the substance
  thereof shall be published once in each week for six  successive  weeks,
  in  two newspapers of the county in which the office of the professional
  service limited liability company is located, to be  designated  by  the
  county  clerk, one of which newspapers shall be a newspaper published in
  the city or town in which the office is intended to  be  located,  if  a
  newspaper  be  published  therein;  or,  if  no  newspaper  is published
  therein, in the newspaper nearest thereto, and proof of such publication
  by the affidavit of the printer or publisher of each of such  newspapers
  must  be  filed  with the department of state. The notice shall include:
  (i) the name of the professional service limited liability company; (ii)
  the date of filing of the articles of organization with the secretary of
  state; (iii) the county within this state, in which the  office  of  the
  professional  service limited liability company is to be located; (iv) a
  statement that the secretary of state has been designated  as  agent  of
  the  professional  service  limited  liability company upon whom process
  against it may be served and the post office address within  or  without
  this  state  to  which  the  secretary of state shall mail a copy of any
  process against it served upon him  or  her;  (v)  if  the  professional
  service  limited liability company is to have a registered agent, his or
  her name and  address  within  this  state  and  a  statement  that  the
  registered  agent is to be the agent of the professional service limited
  liability company upon whom process against it may be  served;  (vi)  if
  the professional service limited liability company is to have a specific
  date  of  dissolution in addition to the events of dissolution set forth
  in section seven hundred one of this chapter, the latest date upon which
  the professional service limited liability company is to  dissolve;  and
  (vii)  the  character  or  purpose  of the business of such professional
  service limited liability company. Failure to cause such  notice  to  be
  published  or  to  file such proof within one hundred twenty days of the
  filing of the articles shall prohibit the professional  service  limited
  liability  company  from maintaining any action or special proceeding in
  this state unless and until such professional service limited  liability
  company  causes  such  notice  to  be  published and files such proof of
  publication. The failure of a  professional  service  limited  liability
  company  to  cause  such  notice  to  be  published  or to file proof of
  publication shall not impair the validity of any contract or act of  the
  professional service limited liability company or the right of any other
  party  to  the  contract  to  maintain  any action or special proceeding
  thereon,  and  shall  not  prevent  the  professional  service   limited
  liability  company  from  defending  any action or special proceeding in
  this state.
    * NB Effective until June 1, 2006
    * (2) (A) Within one hundred twenty  days  after  the  filing  of  the
  articles  of organization, a copy of the same or a notice containing the
  substance thereof  shall  be  published  once  in  each  week  for  four
  successive weeks, in two newspapers of the county in which the office of
  the  professional  service  limited  liability company is intended to be
  located, one newspaper to be printed weekly  and  one  newspaper  to  be
  printed  daily, to be designated by the county clerk, as though the copy
  or notice were a notice or advertisement of  judicial  proceedings,  and
  proof  of such publication, consisting of the certificate of publication
  of  the  professional  service  limited  liability  company   with   the
  affidavits  of  publication of such newspapers annexed thereto, be filed
  with the department of state. Notwithstanding  any  other  provision  of
  law, if the office of the professional service limited liability company
  is  located  in  a  county  wherein  a  weekly or daily newspaper of the
  county, or both, has not been so designated by the  county  clerk,  then
  the  publication  herein  required  shall  be  made in a weekly or daily
  newspaper of the county, or both, as the case may be, which  is  closest
  to,  such  county,  provided that any such newspaper meets all the other
  requirements of this subparagraph. A  copy  or  notice  published  in  a
  newspaper  other  than  the  newspaper  or  newspapers designated by the
  county clerk shall not be deemed to be one of the publications  required
  by  this  subparagraph.  Notwithstanding  any  other provision of law, a
  professional service limited liability company  shall  not  include  for
  purposes   of   clauses  (v-a)  and  (v-b)  of  this  subparagraph,  any
  professional  service  limited  liability  company  which  is   (i)   an
  investment  advisor as defined in the Investment Advisers Act of 1940 or
  a commodity pool operator or commodity trading advisor as defined in the
  Commodity Exchange Act, or (ii) a collective investment vehicle  or  any
  direct  or indirect subsidiary and affiliates thereof sponsored, advised
  or  managed  by  an  investment  adviser,  commodity  pool  operator  or
  commodity trading advisor as set forth in item (i) of this sentence. The
  notice  shall  include: (i) the name of the professional service limited
  liability  company;  (ii)  the  date  of  filing  of  the  articles   of
  organization  with the department of state; (iii) the county within this
  state, in which the office of the professional service limited liability
  company is to be located; (iii-a) the  city,  town  or  village  therein
  together  with the number and street where such office is to be located,
  or, if the street address of such office has not been determined at  the
  time  the  notice  is prepared for publication, the following statement:
  "The street  address  of  the  professional  service  limited  liability
  company's  office  has  not yet been determined."; (iv) a statement that
  the secretary of state has been designated as agent of the  professional
  service  limited  liability  company upon whom process against it may be
  served and the post office address within or without this state to which
  the secretary of state shall mail a  copy  of  any  process  against  it
  served  upon  him  or  her;  (v)  if  the  professional  service limited
  liability company is to have a registered agent, his  or  her  name  and
  address  within  this state and a statement that the registered agent is
  to be the agent of the professional service  limited  liability  company
  upon  whom  process against it may be served; (v-a) the names of the ten
  persons, or such lesser number of persons as permitted  in  this  clause
  who are actively engaged in the business and affairs of the professional
  service   limited   liability   company  and  who  are  members  of  the
  professional service limited liability company having the most  valuable
  membership  interests,  as  such  term  is defined in subdivision (r) of
  section one hundred two of  this  chapter,  in  the  aggregate  in  such
  company.   In   complying  with  the  provisions  of  this  clause,  the
  professional service limited liability company may elect to  select  any
  one  of the aggregate rights components specified in paragraph (i), (ii)
  or (iii) of such subdivision (r) provided that in the event each of  the
  three  component  items  have  less  than ten members, such professional
  service limited liability company shall select the item  which  has  the
  greatest   number  of  members;  (v-b)  the  following  statement:  "The
  inclusion of the name of a person in this notice  does  not  necessarily
  indicate   that   such  person  is  personally  liable  for  the  debts,
  obligations or liabilities of the professional service limited liability
  company,  and  such  person's liability, if any, under applicable law is
  neither increased nor decreased by reason of this notice."; (vi) if  the
  professional  service  limited  liability  company is to have a specific
  date of dissolution in addition to the events of dissolution  set  forth
  in section seven hundred one of this chapter, the latest date upon which
  the  professional  service limited liability company is to dissolve; and
  (vii) the character or purpose of  the  business  of  such  professional
  service  limited  liability company. Where, at any time after completion
  of  the  first  of  the  four  weekly  publications  required  by   this
  subparagraph  and  prior  to  the  completion  of the fourth such weekly
  publication, there is a change in any of the  information  contained  in
  the  copy  or  notice  as  published,  the  professional service limited
  liability  company  may  complete  the  remaining  publications  of  the
  original  copy or notice, and the professional service limited liability
  company shall not be required to publish any further or amended copy  or
  notice.  Where,  at  any  time  after  completion  of  the  four  weekly
  publications required by this subparagraph, there is a change to any  of
  the information contained in the copy or notice as published, no further
  or amended publication or republication shall be required to be made. If
  within  one  hundred  twenty  days  after  its  formation, proof of such
  publication,  consisting  of  the  certificate  of  publication  of  the
  professional  service  limited  liability company with the affidavits of
  publication of the newspapers annexed thereto has not  been  filed  with
  the  department  of  state,  the  authority of such professional service
  limited liability company to carry on, conduct or transact any  business
  in this state shall be suspended, effective as of the expiration of such
  one  hundred  twenty  day  period. Neither the failure of a professional
  service limited liability company to cause such copy  or  notice  to  be
  published   and  such  certificate  of  publication  and  affidavits  of
  publication to be filed with the department of  state  within  such  one
  hundred  twenty  day  period  nor  the  suspension  of such professional
  service limited liability company's authority to carry  on,  conduct  or
  transact  business  in  this  state  pursuant to this subparagraph shall
  limit or impair the validity of any contract or act of such professional
  service limited liability company, or any right or remedy of  any  other
  party  under  or  by  virtue  of  any  contract, act or omission of such
  professional service limited liability company,  or  the  right  of  any
  other  party  to  maintain  any action or special proceeding on any such
  contract, act or omission, or right of such professional service limited
  liability company to defend any action or  special  proceeding  in  this
  state.  If,  at  any  time  following  the  suspension of a professional
  service limited liability company's authority to carry  on,  conduct  or
  transact  business  in  this  state  pursuant to this subparagraph, such
  professional service limited liability  company  shall  cause  proof  of
  publication  in  substantial  compliance with the provisions (other than
  the one hundred twenty day period) of this subparagraph,  consisting  of
  the  certificate  of  publication  of  the  professional service limited
  liability company with the affidavits of publication of  the  newspapers
  annexed  thereto,  to  be  filed  with  the  department  of  state, such
  suspension of such  professional  service  limited  liability  company's
  authority to carry on, conduct or transact business shall be annulled.
    (B)(i)  A  professional  service  limited  liability company which was
  formed prior to the  effective  date  of  this  subparagraph  and  which
  complied  with the publication and filing requirements of this paragraph
  as in effect prior to such effective date shall not be required to  make
  any publication or republication or any filing under subparagraph (A) of
  this  paragraph, and shall not be subject to suspension pursuant to this
  paragraph.
    (ii)   Within  eighteen  months  after  the  effective  date  of  this
  subparagraph, a professional service limited liability company which was
  formed prior to such effective date and which did not  comply  with  the
  publication and filing requirements of this paragraph as in effect prior
  to  such  effective  date  shall  publish  a  copy  of  its  articles of
  organization or a notice containing the substance thereof in the  manner
  required  (other  than  the  one  hundred  twenty  day  period)  by this
  subparagraph as in effect prior to such effective date and file proof of
  such publication, consisting of the certificate of  publication  of  the
  professional  service  limited  liability company with the affidavits of
  publication of the newspapers annexed thereto, with  the  department  of
  state.
    (iii)  If  a  professional  service  limited liability company that is
  subject to the provisions of clause (ii) of this subparagraph  fails  to
  file  the  required  proof  of  publication with the department of state
  within eighteen months after the effective date  of  this  subparagraph,
  its  authority  to  carry  on,  conduct or transact any business in this
  state shall be  suspended,  effective  as  of  the  expiration  of  such
  eighteen month period.
    (iv)  Neither  the failure of a professional service limited liability
  company that is subject  to  the  provisions  of  clause  (ii)  of  this
  subparagraph to fully comply with the provisions of said clause (ii) nor
  the  suspension of such professional service limited liability company's
  authority to carry on, conduct or transact any business  in  this  state
  pursuant  to clause (iii) of this subparagraph shall impair or limit the
  validity of any contract or act of  such  professional  service  limited
  liability company, or any right or remedy of any other party under or by
  virtue  of  any  contract,  act or omission of such professional service
  limited liability company, or the right of any other party  to  maintain
  any  action or special proceeding on any such contract, act or omission,
  or right of such  professional  service  limited  liability  company  to
  defend any action or special proceeding in this state.
    (v) If, at any time following the suspension of a professional service
  limited  liability  company's authority to carry on, conduct or transact
  business in this state, pursuant to clause (iii) of  this  subparagraph,
  such professional service limited liability company shall cause proof of
  publication  in  substantial  compliance with the provisions (other than
  the  one  hundred  twenty  day  period)  of  subparagraph  (A)  of  this
  paragraph,   consisting   of  the  certificate  of  publication  of  the
  professional service limited liability company with  the  affidavits  of
  publication  of  the  newspapers  annexed  thereto, to be filed with the
  department of  state,  such  suspension  of  such  professional  service
  limited  liability  company's authority to carry on, conduct or transact
  business shall be annulled.
    (vi) For the purposes of this  subparagraph,  a  professional  service
  limited  liability  company which was formed prior to the effective date
  of  this  subparagraph  shall  be  deemed  to  have  complied  with  the
  publication and filing requirements of this paragraph as in effect prior
  to such effective date if (i) the professional service limited liability
  company   was  formed  on  or  after  January  first,  nineteen  hundred
  ninety-nine and prior  to  such  effective  date  and  the  professional
  service  limited  liability  company filed at least one affidavit of the
  printer or publisher of a newspaper with the department of state at  any
  time  prior  to  such  effective  date, or (ii) the professional service
  limited liability company was formed prior to  January  first,  nineteen
  hundred  ninety-nine, without regard to whether the professional service
  limited liability company did or did  not  file  any  affidavit  of  the
  printer or publisher of a newspaper with the secretary of state.
    (C)  The  information in a notice published pursuant to this paragraph
  shall be presumed to be in  compliance  with  and  satisfaction  of  the
  requirements  of  this  paragraph.  In  particular,  but  not  by way of
  limitation, the list  of  names  of  persons  included  in  such  notice
  pursuant  to clause (v-a) of subparagraph (A) of this paragraph shall be
  presumed to be complete and accurate and to be in  compliance  with  and
  satisfaction  of  the  requirements  of  this paragraph, and neither the
  omission of any name or names which should have been  included  in  such
  list,  nor the inclusion of any name or names which should not have been
  included in such list, nor any misspelling of or other irregularity with
  respect to any name or names included in  such  list,  shall  negate  or
  otherwise  limit  or  impair  the  effectiveness  of  such notice or the
  publication thereof, provided that such omission, inclusion, misspelling
  or irregularity was not willfully made with the intention  of  deceiving
  the public.
    * NB Effective June 1, 2006
    (d)  A  professional  service  limited liability company, other than a
  professional service limited liability company  authorized  to  practice
  law,  shall be under the supervision of the regents of the university of
  the state of New York and be subject  to  disciplinary  proceedings  and
  penalties,  and  its  articles  of  organization  shall  be  subject  to
  suspension, revocation or annulment for cause, in the same manner and to
  the same extent as is provided with respect  to  individuals  and  their
  licenses, certificates and registrations in title eight of the education
  law   relating   to   the  applicable  profession.  Notwithstanding  the
  provisions of this subdivision, a professional service limited liability
  company  authorized  to  practice  medicine  shall  be  subject  to  the
  pre-hearing  procedures  and  hearing  procedures  as  are provided with
  respect to individual physicians and their licenses  in  Title  II-A  of
  article two of the public health law.
    (e)  A  professional  service  limited liability company authorized to
  practice law shall be subject to the regulation and control of, and  its
  articles  of  organization shall be subject to suspension, revocation or
  annulment for cause by, the appellate division of the supreme court  and
  the  court of appeals in the same manner and to the same extent provided
  in  the  judiciary  law  with  respect  to  individual   attorneys   and
  counselors-at-law.  Such  limited liability company need not qualify for
  any certification under section four hundred sixty-four of the judiciary
  law, take an oath of office under section four hundred sixty-six of  the
  judiciary  law or register under section four hundred sixty-seven of the
  judiciary law.
    (f) The order of suspension, revocation or annulment of  the  articles
  of  organization  of  a  professional  service limited liability company
  pursuant to subdivisions (d) and (e) of this section shall be  effective
  upon the filing of such order with the department of state.

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