If you form a Limited Liability Company (LLC), many legal requirements must be satisfied. Unlike many other states, New York imposes a specific publication requirement. This publication requirement is the last step that must be carried out after filing your Articles of Organization before your LLC will be effective — and your legal and financial liability will, in fact, be limited.
How to Complete the Publication Requirement
Under Section 206 of the New York State Limited Liability Company Law, an LLC must give public notice of its formation in two newspapers of record in the county where the LLC’s principal place of business is located. One publication must be a daily newspaper and the other must be a weekly circulation. Publication must be done for a period of six consecutive weeks. A new LLC has 120 days after the Articles of Organization have been filed to comply.
The notice must include the following information:
- The name of the LLC
- The formation date of the LLC
- The address of the LLC’s principal place of business
- The registered agent’s name and address
- The event that would trigger dissolution of the LLC
- The purpose of the business
The county clerk dictates which newspapers the notice must appear in. Depending upon the county and the newspapers specified by the clerk, the cost of publication can vary from a few hundred dollars to more than one thousand dollars. After the notice has been published for six weeks, the newspapers will issue affidavits of publication to the LLC which must be submitted to the Secretary of State and filed with a Certificate of Publication.
What Happens if You Don’t Complete the Publication Requirement?
Failure to satisfy the LLC publication requirement can result in the suspension of your LLC’s authority to conduct, carry on, or transact business in the state. While non-compliance might mean a company will lose its ability to sue in New York courts, the Limited Liability Company can still enter into contracts or obtain loans.
Many are surprised to learn that even if you did not fulfill the LLC publication requirement within the statutory time frame, you likely will not be subjected to any adverse consequences. To date, no apparent enforcement actions are taken against an LLC for failure to publish and a non-compliant company would still have limited liability protections.
A company can satisfy the requirement after the 120-day time frame and the LLC’s authority to conduct, carry on, and transact business would be reinstated retroactive to the first date business was conducted. Despite this, it is always a good idea to ensure compliance with New York’s LLC publication requirement. Not only can compliance reduce risk, and ensure your company is operating under the law — but partners or vendors may request a Certificate Under Seal before doing business with your company. Also called a “certificate of good standing,” this document cannot be obtained without meeting the publication requirement.
Contact an Experienced New York Business Law Attorney
If you are forming a Limited Liability Company, it’s crucial to have the guidance of a skilled business law attorney who can help you navigate the formation process — and ensure you are compliant with all legal requirements. Brinen & Associates is committed to providing reliable representation to entrepreneurs and business owners for a variety of business matters, including entity formation. Call (212) 330-8151 or send us a message to learn how our New York Business attorneys can help.