Crain’s New York Business reports that members of the group of New York Tech Meetup are working to repeal the law that requires companies to pay a publication fee to form a New York Limited Liability Company (LLC).
Publication fees range from $1000 to over $2000 and are a burden on many start-ups. The rates depend on the county where the business is located.
The New York LLC publication law is as follows:
1. Within 120 days of formation of a New York LLC, the LLC must publish a notice in two (2) newspapers, once a week, for a period of six (6) consecutive weeks, as follows:
(a) The notice must include the name of the LLC, the date of filing, the county in which the office is located, the full street address of the LLC, the purpose of the LLC, and a statement regarding service of process on the secretary of state. The information must be precise… there’s no room for errors.
(b) The notice must be published “as though the copy or notice were a notice or advertisement of judicial proceedings.”
(c) The two (2) newspapers must consist of one (1) weekly paper and one (1) daily paper of general circulation in the county where your LLC was formed. The newspapers must be designated by the county clerk for such publication.
2. After the LLC publishing is complete, you must obtain affidavits of publication from the newspapers in which the legal publishing was completed.
3. The affidavits of publication must be filed with the state, along with other information contained in a Certificate of Publication. There are fees for this filing.
4. If you fail to comply with the LLC publishing law within 120 days of formation, the authority of your limited liability company to carry on, conduct or transact any business in NY state shall be suspended, effective as of the expiration of such 120 day period.
5. The suspension will be annulled upon the filing of the Certificate of Publication, even if filed late.
The main beneficiary of the publication law is print publications like the New York Law Journal and Crains New York Business. Hat tip to Crains for disclosing the conflict. With advertising fees in traditional media in a free fall, expect newspapers to fight for this important source of revenue.
The purpose of the publication requirement is to notify members of the public to know who they are doing business with. I have never heard of anyone who reads the legal notices of any newspaper. Moreover LLC information can easily be searched for free on the New York State Department of State Corporation and Entity Database.
The time has come to abolish the New York LLC publication requirement is law from an era whose time has passed. What do you think?
The Law Office of Frederic R. Abramson represents businesses in New York. If you have a question regarding LLC formation contact me at 212-233-0666.