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Business Owner's Manual

Limited Liability

A limited liability company (LLC) offers "members" (essentially the same as shareholders) both the protections of a corporation and the tax advantages of a partnership.

You should discuss with an attorney or tax advisor whether you should structure your business as a corporation with a subchapter S election or an LLC.

To form and register an LLC, call the Department of State at 518-473-2492 and ask for the LLC information packet. You can find more information about required forms from the Department of State's Frequently Asked Questions list.

Here is some information on important changes to the process of filing as a Limited Liability Company. These changes could cause LLCs (both existing and new) to spend significant amounts of money in advertising in order to maintain their legal status in New York State. The link below offers some comprehensive information about - and the text below the link is a summary of - the new law's requirements.

http://www.dos.state.ny.us/corp/newlegislation2006.html

RE: Important New Requirements for Limited Liability Companies
  • If you operate your business as a Limited Liability Company (LLC) in New York State, you must publish newspaper notice of the existence of that business.

  • A new New York State Law provides for suspension of your LLC if you fail to publish newspaper notice.

  • This new law is effective on June 1, 2006.

  • LLC’s that already exist but have never published newspaper notice have until December 31, 2007 to publish. Failure to publish will result in suspension of the LLC.

Background. New York has always had a law requiring publication of notice of creation of an LLC. However, under the old law, there were no serious consequences to not publishing. As a result, about 40% of the LLCs created did not publish newspaper notice. Last year, the newspaper lobby convinced the State Legislature and the Governor to adopt a tougher law, which takes effect June 1, 2006. Failure to publish, will result in “suspension” of the LLC. As a result, the LLC might be treated as if it does not exist. This is very dangerous for owners and employees of an LLC because any of those people could become personally liable for the debts and liabilities of the LLC. Newly created LLCs have 120 days after effectiveness of their articles of organization to publish.

Old LLCs. If you created your LLC prior to June 1, 2006 but never published newspaper notice, you must do so by December 31, 2007. If you do not, your LLC will be suspended.

Limited Partnerships. The new publication applies to limited partnerships. If you are doing business in a limited partnership, you must meet the same requirements as LLCs.

What to do. First, you should find out whether you have published. You can call the Corporate Division of the New York Department of the State at 1-900-835-2677 or email them at info@dos.state.ny.us to see if you have. If you have published, there is nothing more you need to do. Further, while not necessary, you may request a certified copy showing that you have published. For a $10 fee, you can request this certification including the name of your LLC and writing to: Department of State; 41 State Street, Albany NY, 12231