When starting a new small business, many entrepreneurs agree that a Limited Liability Corporation, or LLC is the way to go. The many advantages of forming an LLC for startup businesses include:
- – Limited liability of the company’s owners for business debts, without the strict guidelines that govern regular corporations
- – Profits and losses can be distributed in any amount or form of capital, without having to create a surplus account for dividends
- – LLCs are not required to have a tiered management structure, and do not need to designate officers
- – LLCs do not have to hold annual meetings, or to meet at all
With all the advantages of the LLC structure for small businesses, there is one controversial hiccup imposed by the State of New York and a handful of other states that requires newly formed LLCs to give public notice via print media of their formation.
The LLC Law in NY State
The LLC law in New York State was adopted as recently as 1994, following in the footsteps of numerous other states, beginning with Wyoming in 1977. In 1989, after over a decade of waffling, the IRS published Revenue Ruling 88-76 which classified LLCs as partnerships for tax purposes. This relaxed tax status drew the attention of critics, who argued that the formation of LLCs would mean less tax revenue for the State. There was also concern that investors’ limited liability would place the burden of business losses onto creditors.
NY State Publishing Requirement Basics
The original statute establishing New York’s LLC laws contained a provision entitled Section 206, that requires new LLCs to publish a notice of formation and file a Certificate of Publication within 120 days of filing their Articles of Organization with the NY Department of State. The law stipulates that the notice must be published in print media, and must include specific information, including:
- LLC name
- Date of formation
- Principal county of business
- Service of process address
- Name and address of the registered agent
- Purpose of the LLC
- Date of dissolution, if provided
That may seem like a lot, but wait, there’s more! NY State is very specific about publication details:
- Your Notice of Formation must be published in two newspapers within the state, one daily publication and one weekly
- Each notice must appear for a period of six weeks
- Only certain newspapers are approved by the State
- In all counties, you must contact the County Clerk for a list of approved publications
- Some counties have the list available online
Once you have sorted that all out, you must pay the newspapers to publish your announcement. In some places like Manhattan, that can add up to over a thousand dollars in fees.
Certificate of Publication
When you have finally complied with the six weeks of publication of your notice, your LLC must then file the Certificate of Publication, which will include the Affidavits of Publication, to the New York Department of State who will then issue a filing receipt for your LLC to keep on file.
Navigating New York State’s Publication Requirements
As a new business owner, you are no doubt eager to get your name and product or services out there and start making money. While the publication requirement clearly slows you down, you can speed things along by delegating the details of publication to Windsor. We have the experience and knowledge to expedite the publication of your notice in any county in New York State. We will see to the minute details of the publication process from start to finish, so you can focus on growing your new LLC.