Dear New York Legislature, Stop Lying about Supporting Entrepreneurship
Please Get Rid of the Publication Requirement
The cost of living in a major startup hub like New York is sky high. We’re currently running LawTrades in NYC so we’re going through it. Any New Yorker will tell you that apartment rent is too high, office rent is high, and everything else in New York always ends up costing more. That’s why we get excited traveling to a places like Austin, TX where it’s only $2–$3 for a beer compared to $7–$12 we pay now in Midtown.
After helping over one thousand startups incorporate in New York, there is one thing that is a total buzz kill when launching your dream — paying a non-sensical publication fee for forming a LLC. It’s a problem that impacts a lot of entrepreneurs because an LLC is one of the most popular entity choices and New York has become a hub for many businesses.
The statute states:
“Section 206 of the New York State Limited Liability Company Law requires that within 120 days after the effectiveness of the initial articles of organization, a limited liability company (LLC) must publish in two newspapers a copy of the articles of organization or a notice related to the formation of the LLC. The newspapers must be designated by the county clerk of the county in which the office of the LLC is located, as stated in the articles of organization.” You can find the rest of the statute/explanation here.”
This publication requirement can cost entrepreneurs anywhere from $300 — $2000! It’s usually on the higher end if you’re living in New York City.
Legislators might argue that the publication requirement is necessary in order to formally show that your business is open for the public. Here’s why the publication requirement should be abandoned. First of all, there’s no reason why a state should require fee’s that can total up to $2000, what a huge barrier to entry. Secondly, not everyone has the luxury of starting a business with massive amounts of capital behind them. A local web designer or dev shop that might start with 10k of capital in the bank has to inevitably fork over 20% of their capital to an arbitrary fee that provides no real value to the company. Finally, who reads newspapers anymore? If you’re going to make a business formally publish to give notice of its existence, at least allow them to publish in a place that gives them exposure.
Most of our customers have to dig into their own pockets to cover the excessive publication requirements because it has to be paid within 3 months of setting up shop. So New York, if you want to be like Silicon Valley please do us a huge favor and get rid of this silly barrier to entry that is killing innovation and start really supporting entreperneurs instead of just claiming that you are like your commercials suggest.
If you agree, please recommend this & share it with your friends so we can get New York’s attention! Of course, if you ever have a legal question about your publication requirement or any other legal need for your startup, get it answered with just one text here.
