Eliminates certain publication requirements for limited liability companies and limited liability partnerships; repealer

1 Co-sponsor

• Brad Hoylman-Sigal

Title of bill

An act to amend the limited liability company law, the arts and cultural affairs law and the state finance law, in relation to publication requirements; and to repeal section 206 of the limited liability company law and paragraph 2 of subdivision (c) of section 1203 of the limited liability company law, relating to affidavits of publication

Purpose or general idea of bill

Repeals publication requirements of articles of organization under the limited liabilities laws and creates an online filing and requirement with the department of state with additional online disclosure of limited liability company filings

Summary of specific provisions

Removes the publication requirements for conversions of partnerships or limited partnerships to limited liability corporations and eliminates the filing fees for the affidavits of publication.

Repeals section 206 of the limited liability company law in relation to the publication requirements for articles of organization of limited liability companies. And amends section 1203 of the limited liability company law to remove these requirements for professional services limited liability companies.

Requires that department of state promulgate rules and regulations for the on-line filing of articles and certificates and establishes standards for electronic access to limited liability company filings.

Establishes a fee of $50.00 for the on-line filing of documents with the department of state and establishes a fund to provide for modernization of Department of State online resources.

Justification

The intent of the Legislature when enacting the LLC Law in 1994 was to allow businesses to enjoy the advantages of incorporation, without requiring them to adopt the organizational constraints of the business corporation law. This is particularly useful for small businesses.

§ 206 of the LLC Law requires that after the articles of organization have been filed, the LLC must publish a copy of the articles or a notice of their substance, once a week, for six consecutive weeks, in two newspapers designated by the county clerk from the county where the LLC is located. The LLC is then required to file affidavits of publication within 120 days and pay an additional fee of $50.00. These requirements are both unnecessary and very expensive - sometimes prohibitively so, as the designated newspapers have an effective monopoly in setting the charges for notices. Also, there are no similar requirements in the Business Corporation Law.

The transparency that publishing this information allows can be better achieved today through the internet. Indeed, the Department of State already maintains an excellent publicly-accessible online database. However, current law does not require electronic access to articles of organization or specify other information about LLCs that must be provided online.

Passage of this legislation would remove onerous and unnecessary requirements on LLCs forming in New York state while improving public access to information about LLCs. It is extraordinarily difficult to find published information when or after it appears in print in a daily or weekly local print publication. Online filings will improve a citizen's access-to this information.

Prior legislative history

A.11287/S.8381 of 2008. A.4496/S.1667 of 2009-2010 A.885/S.437 of 2011-2012 S3259/A942 2013-14

Fiscal implications

None

Effective date

This act shall take effect on the one hundred eightieth day after it shall have become law, provided, however that effective immediately the department of state is directed and authorized to promulgate all rules and regulations necessary to implement the provisions of this act on or before its effective date.