New York Law (NYLE) Practice Exam

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Prepare for the New York Law Exam with interactive study tools and comprehensive multiple-choice quizzes. Enhance your understanding with detailed explanations and tips to excel in your NYLE. Get ready to ace your exam!

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At the time of its incorporation, how many members must an LLC have?

1
2
3
At least half the number of shareholders.

The correct answer is: 1

A Limited Liability Company (LLC) can be formed with just one member at the time of incorporation. This characteristic is one of the key features of an LLC, making it a flexible and attractive option for business owners. Unlike corporations, which may have more stringent requirements regarding the number of shareholders, the LLC structure allows for single-member formations. This provides individuals with the advantages of limited liability and pass-through taxation, without the necessity of partnering with others. While multiple-member LLCs are permitted and can offer additional benefits through shared management and investment, the law explicitly allows for the establishment of an LLC with a sole member. This flexibility is foundational in understanding how LLCs operate under New York law and is an important consideration for anyone looking to establish a business entity in the state. Thus, the response accurately reflects the legal framework for forming an LLC in New York.