What's happening
This bill requires LLCs to publish formation information in a state-run online database and sets flat newspaper publication fees.
Why it matters
Creates a new, searchable online database. By requiring LLC formation details to be published in a state-run electronic system, the bill makes it easier for the public, businesses, and government agencies to access accurate and up-to-date information about LLCs, enhancing transparency and accountability.
Caps publication costs for new LLCs. The legislation sets a flat $150 fee per newspaper for required newspaper publications, addressing complaints that current publication requirements are overly expensive and inconsistent, particularly for small businesses and startups.
Maintains public notice but modernizes its format. While retaining the traditional newspaper notice requirement, the bill adds an online publication mandate, reflecting the shift towards digital access and aiming to reach a broader audience more effectively.
Potentially lowers barriers to forming LLCs. By reducing publication expenses and simplifying access to organizational details, the bill could encourage more entrepreneurs to form LLCs in New York, potentially driving economic activity and competitiveness in the state.
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Who cares
Headline styles
Lower LLC Fees, Create Database
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to corporations, authorities and commissions
- Referred to corporations, authorities and commissions
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3325
2017-2018 Regular Sessions
IN SENATE
January 20, 2017
Introduced by Sen. AVELLA -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions
AN ACT to amend the limited liability company law, in relation to publication fees and the creation of an electronic database
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision (a) of section 206 of the limited liability company law, as amended by chapter 44 of the laws of 2006, is amended to read as follows:
(a) Within one hundred twenty days after the effectiveness of the initial articles of organization as determined pursuant to subdivision (d) of section two hundred three of this article, a copy of the same or a notice containing the substance thereof shall be published on the department of state database pursuant to section two hundred nine of this article and once in each week for six successive weeks, in two newspapers of the county in which the office of the limited liability company is located, one newspaper to be printed weekly and one newspaper to be printed daily, to be designated by the county clerk for a flat fee of one hundred fifty dollars to each newspaper so designated. When such county is located within a city with a population of one million or more, such designation shall be as though the copy or notice were a notice or advertisement of judicial proceedings. Proof of the publication required by this subdivision, consisting of the certificate of publication of the limited liability company with the affidavits of publication of such newspapers annexed thereto, must be filed with the department of state. Notwithstanding any other provision of law, if the office of the limited liability company is located in a county wherein a weekly or daily newspaper of the county, or both, has not been so designated by the county clerk, then the publication herein required shall be made in a weekly or daily newspaper of any county, or both, as the case
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06807-01-7
S. 3325 2
may be, which is contiguous to, such county, provided that any such newspaper meets all the other requirements of this subdivision. A copy or notice published in a newspaper other than the newspaper or newspapers designated by the county clerk shall not be deemed to be one of the publications required by this subdivision. The notice shall include: (1) the name of the limited liability company; (2) the date of filing of the articles of organization with the department of state and, if the date of formation is not the date of filing of the articles of organization, the date of the formation of the limited liability company; (3) the county within this state, in which the office of the limited liability company is located; (3-a) the street address of the principal business location, if any; (4) a statement that the secretary of state has been designated as agent of the limited liability company upon whom process against it may be served and the post office address within or without this state to which the secretary of state shall mail a copy of any process against it served upon him or her; (5) if the limited liability company is to have a registered agent, his or her name and address within this state and a statement that the registered agent is to be the agent of the limited liability company upon whom process against it may be served; (6) if the limited liability company is to have a specific date of dissolution in addition to the events of dissolution set forth in section seven hundred one of this chapter, the latest date upon which the limited liability company is to dissolve; and (7) the character or purpose of the business of such limited liability company. Where, at any time after completion of the first of the six weekly publications required by this subdivision and prior to the completion of the sixth such weekly publication, there is a change in any of the information contained in the copy or notice as published, the limited liability company may complete the remaining publications of the original copy or notice, and the limited liability company shall not be required to publish any further or amended copy or notice. Where, at any time after completion of the six weekly publications required by this subdivision, there is a change to any of the information contained in the copy or notice as published, no further or amended publication or republication shall be required to be made. If within one hundred twenty days after its formation, proof of such publication, consisting of the certificate of publication of the limited liability company with the affidavits of publication of the newspapers annexed thereto has not been filed with the department of state, the authority of such limited liability company to carry on, conduct or transact any business in this state shall be suspended, effective as of the expiration of such one hundred twenty day period. The failure of a limited liability company to cause such copy or notice to be published and such certificate of publication and affidavits of publication to be filed with the department of state within such one hundred twenty day period or the suspension of such limited liability company's authority to carry on, conduct or transact business in this state pursuant to this subdivision shall not limit or impair the validity of any contract or act of such limited liability company, or any right or remedy of any other party under or by virtue of any contract, act or omission of such limited liability company, or the right of any other party to maintain any action or special proceeding on any such contract, act or omission, or right of such limited liability company to defend any action or special proceeding in this state, or result in any member, manager or agent of such limited liability company becoming liable for the contractual obligations or other liabilities of the limited liability company. If, at any time following the suspension
S. 3325 3
of a limited liability company's authority to carry on, conduct or transact business in this state pursuant to this subdivision, such limited liability company shall cause proof of publication in substantial compliance with the provisions (other than the one hundred twenty day period) of this subdivision, consisting of the certificate of publication of the limited liability company with the affidavits of publication of the newspapers annexed thereto, to be filed with the department of state, such suspension of such limited liability company's authority to carry on, conduct or transact business shall be annulled.
§ 2. Section 209 of the limited liability company law is amended to read as follows:
§ 209. Filing with the department of state. A signed articles of organization and any signed certificate of amendment or other certificates filed pursuant to this chapter or of any judicial decree of amendment or cancellation shall be delivered to the department of state. If the instrument that is delivered to the department of state for filing complies as to form with the requirements of law and the filing fee required by any statute of this state in connection therewith has been paid, the instrument shall be filed [and], indexed and electronically published in an online database by the department of state. The department of state shall not review such articles or certificates for legal sufficiency; its review shall be limited to determining that the form has been completed.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the limited liability company law, in relation to publication fees and the creation of an electronic database
Purpose
To alleviate some of the burdensome publication costs and requirements for newly-formed limited liability companies.
Summary of provisions
Section 1 establishes that notice containing the creation of a limited liability company will be published the Department of State database once in each week for six weeks, in two newspapers of the county where the LLC is located. Additionally, the fee for such publication will be a flat fee of one hundred fifty dollars for each newspaper designated by the county clerk.
Section 2 amends section 209 of the limited liability law to require electronic publication by the Department of State of all LLC publication filings.
Section 3 sets forth an immediate effective date.
Justification
The publication requirements for Limited Liability Companies in New York State, under the current limited liability law, can be an arbitrary and often highly expensive requirement for newly-founded LLCs. This is.because the current mandatory publication requirements must be published in print, and the Department of State randomly selects the publication in which the new company must publish its notification. Often times, the selected newspapers charge substantial fees, which may create a large financial burden on a new company.
Accordingly, this legislation will create a flat fee of one hundred and fifty dollars for LLC publication. Additionally, this bill creates an online database through the Department of State where the public can be put on notice of the LLCs formation. This step will assist LLCs in avoiding the exorbitant costs and antiquated notification requirements of the current LLC publication system.
Legislative history
New Bill
Fiscal implications
None
Effective date
The act shall take effect immediately
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.