New York LLC for Physicians Law

Limited Liability Company – General – New York

The practice of medicine in the State of New York by a professional service limited liability company is controlled generally by the New York Limited Liability Law as set out in NEW YORK CONSOLIDATED LAWS, Chapter 34.

In addition to the statutory provisions relative to the professional service limited liability company practice of medicine and the profession specific provisions of law applicable to the practice of medicine set out in NEW YORK CONSOLIDATED LAWS, Chapter 16, Title 8, Articles 131 and 131-A, both individuals and professional service limited liability companies which engage in the practice of medicine are subject to the rules and regulations of the New York State Board of Medicine.

The following is a summary of the law applicable to professional service limited liability companies. Nothing in the Limited Liability Company Law repeals, modifies, or restricts any provision of the education law or any rules or regulations adopted thereunder except that hose laws are in conflict with the Limited Liability Company Law.

These selected definitions are applicable to a professional service limited liability company:

1. The “licensing authority” is the regents of the university of the state of New York or the state education department, as the case may be, in the case of all professions licensed under title eight of the education law, and the appropriate appellate division of the supreme court in the case of the profession of law.
2. “Profession” includes any practice as an attorney and counselor-at-law, or as a licensed physician, and those professions designated in title eight of the education law.
3. “Professional” means an individual duly authorized to practice a profession, a professional service corporation, a professional service limited liability company, a foreign professional service limited liability company, a registered limited liability partnership, a foreign limited liability partnership, a foreign professional service corporation or a professional partnership.
4. A “professional service” is any type of service to the public that may be lawfully rendered by a member of a profession within the purview of his or her profession.
5. A “professional service limited liability company” is a limited liability company organized under New York Limited Liability Company Law to render a professional service.

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 a professional service limited liability company for pecuniary profit for the purpose of rendering the professional service or services as such professionals are authorized to practice. 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 New York.

Notwithstanding any other provision of law, the name of a professional service limited liability company may contain any word that can be used in the name of a partnership or professional service corporation practicing a profession that the limited liability company is authorized to practice. The name may not contain any word that could not be used by a partnership or professional service corporation. The name of a professional service limited liability company may not contain the name of a deceased person unless:

1. Such person’s name was part of the name of such limited liability company at the time of such person’s death; or
2. Such person’s name was part of the name of an existing partnership or professional service corporation and at least two-thirds of such partnership’s partners or corporation’s shareholders, as the case may be, become members of such limited liability company.

A professional service limited liability company name must end with the words “Professional Limited Liability Company” or “Limited Liability Company” or the abbreviation “P.L.L.C.”, “PLLC”, “L.L.C.” or “LLC”.

The articles of organization of a professional service limited liability company must meet the requirements of the Limited Liability Company Law and must state:

1. The profession or professions to be practiced by the limited liability company;
2. 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;
3. 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;

There must be filed with the articles of organization a certificate or certificates issued by the licensing authority certifying that each of the proposed members and managers, if any, who are individuals is authorized by law to practice a profession that the 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.

A certified copy of the articles of must be filed by the professional service limited liability company with the licensing authority within thirty days after the filing of such certificate.

Within one hundred twenty days after the filing of the articles of organization, a copy of the articles or a notice containing the substance of the articles must 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 must include:

1. The name of the professional service limited liability company;
2. The date of filing of the articles of organization with the secretary of state;
3. The county within New York, in which the office of the professional service limited liability company is to be located;
4. 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 New York to which the secretary of state shall mail a copy of any process against it served upon him or her;
5. If the professional service limited liability company is to have a registered agent, his or her name and address within New York 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;
6. 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 the Limited Liability Company Law, the latest date upon which the professional service limited liability company is to dissolve; and
7. The character or purpose of the business of the professional service limited liability company.

Failure to cause the 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 New York 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 New York.

A professional service limited liability company, other than a professional service limited liability company authorized to practice law, is 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.

No professional service limited liability company may render a professional service except through individuals authorized by law to render such professional service, as individuals.

Each report, diagnosis, prognosis and prescription made or issued by a professional service limited liability company practicing medicine, dentistry, podiatry, optometry, ophthalmic dispensing, veterinary medicine, pharmacy, nursing, psychology, physical therapy or chiropractic shall bear the signature of one or more physicians, dentists, podiatrists, optometrists, ophthalmic dispensers, veterinarians, pharmacists, nurses, licensed psychologists, physical therapists or chiropractors, respectively, who are in responsible charge of such report, diagnosis, prognosis or prescription.

Each member, manager, employee or agent of a professional service limited liability company is personally and fully liable and accountable for any negligent or wrongful act or misconduct committed by him or her or by any person under his or her direct supervision and control while rendering professional services on behalf of the limited liability company.

No professional service limited liability company may engage in any profession or professions other than those set forth in its articles of organization. A professional service limited liability company may only engage in a profession or professions as to which one or more of its members is authorized by law to render professional services in New York. In addition to engaging in such profession or professions, a professional service limited liability company may carry on, or conduct or transact any other business or other activities as to which a limited liability company may be formed.

A member of a professional service limited liability company may be only:

1. A professional, other than a foreign professional service corporation, foreign professional service limited liability company or foreign limited liability partnership, authorized by law to practice in.
2. New York a profession that such limited liability company is authorized to practice and who is or has been engaged in the practice of such profession in such limited liability company or a predecessor entity, or who will engage in the practice of such profession in such limited liability company within thirty days of the date such professional becomes a member;
3. A professional, other than a foreign professional service corporation, foreign professional service limited liability company or foreign limited liability partnership, authorized by law to practice in any foreign jurisdiction a profession that such limited liability company is authorized to practice and who is or has been engaged in the practice of such profession in such limited liability company or a predecessor entity, or who will engage in the practice of such profession in such limited liability company within thirty days of the date such professional becomes a member; or
4. A foreign professional service corporation, foreign professional service limited liability company or foreign limited liability partnership authorized by law to practice in New York or in any foreign jurisdiction a profession that such limited liability company is authorized to practice and who is or has been engaged in the practice of such profession in such limited liability company or a predecessor entity, or who will engage in the practice of such profession in such limited liability company within thirty days of the date such professional becomes a member. With respect to a professional service limited liability company formed to provide medical services, each member of the limited liability company must be licensed pursuant to article 131 of the education law to practice medicine in New York.

No member of a professional service limited liability company may enter into a voting trust agreement, proxy or any other type of agreement vesting in another person, other than another member of the limited liability company or professional who would be eligible to become a member of such limited liability company, the authority to exercise voting power of any or all of the membership interests of the limited liability company. All membership interests or proxies granted or agreements made in violation of this statutory prohibition are void.

If any member, manager or employee of a professional service limited liability company who has been rendering professional service to the public becomes legally disqualified to practice his, her or its profession within New York, he, she or it shall sever all employment with and financial interests (other than interests as a creditor or vested rights under a bona fide retirement program) in the limited liability company forthwith.

All provisions of law regulating the rendering of professional services by a person elected or appointed to a pu0blic office shall be applicable to a member, manager or employee of such limited liability company in the same manner and to the same extent as if fully set forth herein. Such legal disqualification to practice such profession within New York shall be deemed to constitute an irrevocable offer by the disqualified member to sell his, her or its membership interest to the professional service limited liability company, pursuant to the provisions of New York Limited Liability Law or of the articles of organization or operating agreement, whichever is applicable. Compliance with the terms of such an offer shall be specifically enforceable in the courts of New York. A professional service limited liability company’s failure to enforce compliance with this provision shall constitute a ground for its dissolution.

A professional service limited liability company must purchase or redeem the membership interest of a member in case of such member’s death or disqualification, or in the case of a member that 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, dissolution or disqualification of such 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 (in the case of registered limited liability partnership, foreign limited liability partnership and professional partnership, other than a dissolution followed by a reconstitution where at least a majority of the total interests in the current profits of a successor partnership are held by partners of the predecessor partnership that was a registered limited liability partnership, foreign limited liability partnership or professional partnership who were partners of such predecessor partnership immediately prior to the dissolution of such predecessor partnership) or the death, dissolution or disqualification of all of its shareholders, members or partners, within six months after the appointment of the executor or administrator or other legal representative of the estate of such deceased member, or within six months after such disqualification or dissolution, at the book value of such membership interest as of the end of the month immediately preceding the death, disqualification or dissolution of the member as determined from the records of the limited liability company in accordance with its regular method of accounting. The operating agreement of the limited liability company may modify this statutory provision by providing for a shorter period of purchase or redemption, or an alternate method of determining the price to be paid for the membership interest, or both. If the limited liability company fails to purchase or redeem such membership interest within the required period, a successful plaintiff in an action to recover the purchase price of such membership interest shall also be awarded reasonable attorneys’ fees and costs. These statutory restrictions do not require the purchase of the membership interest of a disqualified member where the period of disqualification is for less than six months and the member again becomes eligible to practice his or her profession within six months from the date of disqualification.

No member of a professional service limited liability company may sell or assign his, her or its membership interest in such limited liability company except to another professional eligible to become a member of such limited liability company or except in trust to another professional who would be eligible to become a member if such professional were employed by such limited liability company.

Any sale or transfer, except by operation of law or court decree or except for a professional service limited liability company having only one member, may be made only after the same shall have been approved by the vote or written consent of such proportion, not less than a majority in interest of the members, exclusive of the interest of the member proposing to sell or transfer such membership interest, as may be provided in the operating agreement of such professional service limited liability company. The voting interest held by the member proposing to sell or transfer his, her or its membership interest may not be voted or counted for any purpose, unless all the members consent that such interests be voted or counted. The professional service limited liability company may provide, in lieu of or in addition to the foregoing provisions, for the alienation of membership interests and may require the redemption or purchase of such membership interests by the limited liability company at prices and in a manner specifically set forth. The existence of the restrictions on the sale or transfer of a membership interest, if applicable, in the operating agreement, shall be noted conspicuously on the face or back of every certificate representing a membership interest issued by a professional service limited liability company. Any sale or transfer in violation of these restrictions is void.

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