Getting LLC from Proper Lawyer


1

I recently registered a NY LLC with LegalZoom. The LLC is complete but I have to do a few things in order to have the LLC in good standing like sending back a few tax-related forms and completing the "llc publication requirement". I didn't do none of it and it's over the 90 days for the llc publication requirement. Can I do nothing and abandone the LLC, what will happen? Can I keep the name and restart the LLC with a proper lawyer?

Legal

asked Mar 6 '11 at 09:11
Blank
Matt
141 points
Get up to $750K in working capital to finance your business: Clarify Capital Business Loans

3 Answers


2

The LLC will not be automatically abandoned if you don't handle the publication requirement. You can still satisfy the publication requirement at any time and the LLC will then be ok. The consequences of not handling the publication requirement now are minimal and you can always fix it. Yes, you can "restart" the LLC with a proper lawyer but what's the point in getting a lawyer when the remaining steps are minimal. You don't need a lawyer to handle the publication requirement or doing tax filings.

If you want to get rid of the LLC then there is a process to follow to dissolve the LLC (requires some corporate documentation).

answered Mar 6 '11 at 12:28
Blank
User6492
1,747 points
  • The consequences have always been minimal/non-existent - it only affects the LLC's ability to initiate lawsuits, and even then the ability can be granted retroactively by publishing after the suit. – Henry The Hengineer 14 years ago

1

I'm not a lawyer, so take this with a grain of salt.

I believe that what you need to do is write a letter to your judge of probate and secretary of state, explaining the situation, and notifying them that the LLC never opened its doors (if that is the case) and is permanently closed. If you purchased a business license in your city or county, you should also send a letter to the business license office which explains the situation.

If you actually did do business and made some revenues, but never paid the fees, then you need to consult a lawyer, and maybe an accountant about how to do your taxes.

I believe that you can keep the name and restart the LLC with a proper lawyer no problem.

Best wishes!

answered Mar 6 '11 at 09:52
Blank
Aaron Gray
386 points

0

Here's some legal research on the subject to back the economic decision. No, you will not lose your LLC if you don't publish (it's pretty much an expensive tax on you $500-1600+ and a subsidy for newspapers).

http://www.seravia.com/research/amidst-hard-times-new-york-llcs-continue-to-subsidize-local-publications http://www.eminutesonline.com/what-happens-if-you-ignore-new-york%E2%80%99s-llc-publication-requirement/

In re Equities Capital Corp., is recent bankruptcy case involving the publication requirement. In that case, a foreign LLC (which is subject to publication requirements that are nearly identical to those applicable to New York LLCs) sought to retain a contract deposit after the debtor (Equities Capital) failed to close on a transaction involving an option contract. The debtor argued that the foreign LLC—which did not fulfill the publication requirement within 120 days of qualifying to do business in New York—couldn’t recover for breach of the option contract because: (1) it didn’t have the authority to enter into the option contract in the first place; and (2) therefore couldn’t sue to keep the deposit. The court rejected the debtor’s argument on two grounds.
First, the court noted that §802 of the Limited Liability Company Law (which is substantially identical to §206) explicitly says that the failure to comply with the publication requirement “shall not limit or impair the validity of any contract or act of such . . . limited liability company, or any right or remedy or any other party under or by virtue of any contract, act or omission of such . . . limited liability company.”
Second, the court pointed out that, under the same statute, when an LLC files documentation of its substantial compliance with the publication requirement, the previous suspension of its authority to do business in New York is annulled. Since the debtor complied with the publication requirement after the litigation over the deposit commenced, the suspension was revoked, retroactive to the date the LLC started doing business in New York; in other words, it was as if the suspension had never happened.
A handful of New York state courts have been faced with similar arguments in cases involving New York LLCs, and all have reached the same conclusion. Thus, an LLC that wishes to enforce a contract doesn’t even have to wait until publication is complete to sue for breach of contract: it can cure its failure to publish even after it files a lawsuit.
So, while we can’t advise you to ignore the law, we can tell you that our legal research hasn’t revealed a single case in which an LLC suffered any negative consequences because it failed to comply with the New York LLC publication requirement.

This is not legal advice nor does it constitute and attorney-client relationship.
answered Mar 9 '11 at 04:04
Blank
Henry The Hengineer
4,316 points

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics:

Legal