Publication Requirement - New York LLC or Delaware LLC?
I am sometimes asked whether a New York business should choose to form a Delaware LLC instead of a New York LLC, especially because of the (some might say antiquated) publication requirement (Section 206 of the New York State Limited Liability Company Law requires that within 120 days of filing the articles of organization, a LLC must publish in two newspapers designated by the county clerk a notice of formation for a period of six weeks). The costs of such publication depend on the county and can be high, e.g., in Manhattan over $1,000. In contrast, it is easy and relatively inexpensive to form an LLC in Delaware. However, if the business is based and conducts its activities in New York, it may not be able to save on the publication costs. If an out-of-state LLC transacts/conducts business in New York, it may be required to register with the New York Department of State (as a "foreign limited liability company") and such registration also triggers the publication requirement. Thus, from a pure formation cost perspective it might in the end be more expensive to proceed in this vein but there are of course other elements that may play a role in the choice of jurisdiction for the LLC.
New York, February 20, 2018
The information contained in this blog is provided for informational purposes only and should not be understood or construed as legal advice.