New York wants new businesses to start up here! Newly hired employees, innovative new services and products, new revenue and profits and tax income to the state and more! I’ve heard NY politicians talk about it, “We’re making New York an attractive place to start and grow your company!” and the like.
We’ve heard the stories about successful companies started in a garage or studio apartment with an idea and just a few hundred dollars in some cases. The next thing you know they’ve got a campus, thousands of employees and plans to hire thousands more. Those stories are never about New York companies though, are they? Coincidence? Bad luck? New Yorkers aren’t as smart as people in Washington state or Virginia or elsewhere?
Actually, just the opposite. New York entrepreneurs are smart enough to know that New York state and especially the 5 boroughs of New York City have a unique “Publication” requirement for all new LLCs that will likely cost them thousands of dollars and 6+ weeks of hassles. Open your business elsewhere, no such requirement and no such fee. Hmmm…, NY and pay the fee or anywhere else and not pay the fee. Tough choice for them, eh? How does NY compare to neighboring states for formation of new LLCs per capita? Terrible, of course.
The “Publication” requirement requires new NY businesses to publish an official notice of their existence in multiple printed newspapers for 6 consecutive weeks. Any newspapers? Of course not. They select the newspapers and you have to call the county clerk to get the names of the papers who will get the $. They say the requirement is so the general public is “notified” yet the New York Law Journal with its high rates happens to seemingly always be one of the required newspapers. Big circulation of the general public for that one, eh? Oh, and the information is already available online, for free, to anyone in the general public who wants it on the Secretary of State’s website.
How unique is the fee? 48 states don’t have it, that how unique it is. If you’ve ever been curious about what a “special interest” group is and how their influence can drive lawmakers to do something for just them at the expense of virtually everyone else, here’s your case study at the state level.
$2000.00 may or may not seem like a lot of money to you but to some budding entrepreneurs it is money they could clearly use better elsewhere (elsewhere meaning anywhere other than New York).