An LLC (Limited Liability company) is a business corporation that includes either one or more members who have limited liability for the business in terms of their liabilities/profits/loses/credits etc. While it is a company, its characteristics are of a corporation with taxation being applicable to the business rather than each member of the business as an individual.
How is LLC publication done?
Any business that has to set up in New York has to go through the NYS department laws of publicizing their business. For this, there are few steps to be followed by the new LLC like choosing a name for their business that is unique, follows the rules of the state, forming articles of formation, getting agreements and licenses in place etc. After all this is done, the new LLC has to publish their business in 2 different newspapers, one weekly and one daily in the county in which the LLC publishing NYcomes under, for a period of 6 consecutive weeks. It should have some basic information of the business and should not just be an advertisement but should follow the rules of the statute. The next step is to procure the publishing affidavit form the newspaper publication and submitting it to the Department of state along with a certification f publication. That completes the publication and the LLC now falls under the compliance of the state.
The LLCs publication rule came into action from June 1 2006. It is statutory requirement strictly followed by the new formed CCLs failing of which may lead to suspend the company to do transacts, business in New York.
Why should you get it done?
- The first reason is that it is the rule of the state and every company that wants to do some business in New York has to fulfill this. Else, they are eligible for a penalty and could even close their business.
- This also helps the members of the LLC to be protected from personal liabilities for any decisions and debts made by the business.
- While the LLC can choose to be taxed as a partnership, a sole proprietor, C corporation or S corporation, they have a great flexibility for taxation.
Taxes can also be based on members’ personal tax returns and not the business. With this they can even avoid double taxation at the member level and again at business level. However, this depends if the LLC elects to be taxed as a C corporation.
- With the above point, the company can also have flexibility in their management structure. There is clarity on distributing the profits/loses/credits/debts/interest percentage among the members.
- Record keeping and paper work is much simpler as compared at corporation level. The costs are also small.
- There are very few restrictions on profit sharing between the members in LLC publishing NY. If the LLC chooses to be taxed as partnership, they can allocate the distribution of things like income/profits/loses/deductions/credits through the company operating agreement that was done as part of the formation of LLC as long as tax rules and criteria are all complied.