In 2006, New York altered its publication requirements for partnerships including limited liability companies. Client alerts with titles such as “Publish or Perish!” had everyone asking questions; law firms reported that expenses associated with the new publication requirements could be significant. Three years out, this article seeks to provide practical advice regarding the formation of LLCs in New York and Delaware with a focus on how the new publication requirements might influence the choice of a jurisdiction of formation.
I am often asked, “What is the difference between forming an LLC in New York and Delaware?” Because of Delaware’s business-friendly courts, I often advise my clients to form in Delaware, determine next where they will be “doing business” and proceed to qualify the entity in those jurisdictions. For those LLCs “doing business” in New York, an analysis of the publication requirements is necessary and should be done carefully to avoid unnecessary costs. Procedures in the two states are similar, but only New York has a publication requirement, which adds significant costs. Nevertheless, LLCs intending to operate in New York may wish to form there because foreign LLCs (those organized out-of-state) doing business in New York State cannot avoid publication.
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