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Updated November 4, 2013
In 1994, the New York Legislature passed the Limited Liability Company Law with the goal of allowing businesses to enjoy the benefits of incorporation without the formalities of traditional business structures.
As part of the Limited Liability Company Law, LLCs formed in New York and those seeking qualification to do business here are required to publish information about the company in two newspapers for six weeks. This requirement was originally intended to protect consumers by putting the public on notice of a structure that protects its owners from liability.
Before 2006, the only penalty for failing to comply with this requirement was that the LLC could not file a lawsuit in New York. In 2006, the New York Legislature established more stringent requirements and increased the penalties for noncompliant LLCs: LLCs that fail to complete the publication requirements are not allowed to conduct business in New York.
Most states have eliminated similarly outdated publication requirements and have made the same information available through the state government website. Even in the states where LLCs are still required to publish their formation in newspapers, doing so costs substantially less than it does in New York.
Since 2008, business-friendly legislators have proposed bills that would ease or repeal the LLC publication requirement (links below). Unfortunately, after referring the bill to the Senate and Assembly Committee on Corporations, Authorities, and Commissions, the committees did not take the steps needed to send the bill to the Legislature for a vote.