USA – NEW YORK Law and Practice Contributed by: Lindsey Haubenreich, Joseph Heins, Timothy Moriarty, Kimberly Nason and Matthew Fitzgerald, Phillips Lytle LLP
5.5 Applicable Governance Requirements Corporations The day-to-day management of a corporation’s activi - ties is the responsibility of the directors of the corpo - ration, who generally delegate such management to officers. Certain significant matters associated with the governance and operation of the corporation may require the approval of the corporation’s shareholders. Corporate governance is dictated by the provisions of the certificate of incorporation, by-laws and statu - tory law. Limited Liability Companies An LLC is presumed to be managed by its members unless the articles of organisation provide that the management is carried on by managers. Except as provided in the operating agreement, each member of an LLC is entitled to vote in proportion to the member’s share of current profits. The articles of organisation of an LLC may provide for classes or groups of members having such relative rights, powers, preferences and limitations as the operating agreement of such LLC may provide. Members in a member-managed LLC, and managers in a manager-managed LLC, who exer - cise management powers or responsibilities have the duty of care and loyalty. Limited Partnerships Limited partnerships are managed by at least one general partner. Limited partnership governance is dictated by the terms of the limited partnership agree - ment, with the limited partnership law setting forth statutory defaults. In order to insulate the limited part - ners from unlimited liability, the general partner must be solely responsible for the management and opera - tion of the partnership business. The limited partners cannot participate in the management or operation of the business. A limited partner who does take part in the control, management or operation of the business of the lim - ited partnership, including signing any documents on behalf of the partnership in its own capacity as a lim - ited partner, risks being exposed to unlimited liability. The Corporate Transparency Act was passed by Con - gress in 2021 and imposes a new beneficial ownership reporting requirement on both newly formed entities
and those that are currently in existence. The objec - tive of the legislation is to make it more difficult for bad actors to shield their identity or facilitate illegal transactions through entities that may be opaque to federal governmental authorities in terms of the iden - tity of individuals that own and operate those entities. 5.6 Annual Entity Maintenance and Accounting Compliance New York corporations and limited liability companies have biennial statement fees of USD9 each. These fees are subject to change. 6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time A lease and a licence are two common legal arrange - ments that allow a person, company or other organi - sation to occupy or use real estate that it does not own. A lease is a contract between a landlord and a ten - ant whereby the tenant is given the exclusive right to occupy the landlord’s property for an agreed-upon time period. A lease is an interest in real property that can be transferred to another, subject to restrictions contained in the lease agreement. A licence is an agreement granting a limited use of a property. A licence is not an interest in real property. A licence is typically terminable by the licensor, not transferable and not exclusive, and may be subject to a right of relocation. 6.2 Types of Commercial Leases Net Leases The tenant pays rent, as well as all or a portion of the operating expenses for the property, such as taxes, insurance, maintenance and utilities. Parties some - times refer to net leases as single net leases, double net leases or triple net leases. The distinctions are not absolute, but, in a triple net lease, the tenant pays all costs and expenses with respect to the real property.
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