4 ms·

I voted twice. I run a startup company that provides consulting services and acts as an incubator for in-house ideas. If one of the side projects grows large

by mjolk 12y ago

I voted twice. I run a startup company that provides consulting services and acts as an incubator for in-house ideas. If one of the side projects grows large enough that it starts making "real" money, it will get its own LLC and DBAs to separate the liability from parent's core business of consulting. I'm in NY, which is home to one to publication requirements, so I only form LLCs for projects when the potential for profit exceeds $10,000 a year. Otherwise, it's really not worth the hassle to start working on the business.

will_brown 12y ago
Check out this old comment I posted: https://news.ycombinator.com/item?id=7031842 https://news.ycombinator.com/item?id=7031842 I described a hack my old employer (a law firm) utilized to accomplish the NY LLC publication requirement. Pretty cost effective, total was $519.90 to organize/file the LLC with the NY Secretary of State and complete the publication requirement.
- mjolk 12y ago
  I know about that hack, but I'm not sure I'd advise others to follow suit. You end up spending a non-trivial amount of money in fees and there's definitely a legal and time cost involved. IIRC, there's a couple of other issues that are pretty trivial for a law firm to smooth out, but not something you'd want to deal with if you're paying your legal costs per engagement or hour. For what it's worth: "this runs counter to the general principal of SV where they are pro-Corp." I believe this is because in California, there's a minimum tax of $800 on LLCs, so you might as well become a big boy corporation and not eat the 13.3% profit fee, get lower taxes (and/or or tax "hacks" (cheats)), and (especially pertinent to VCs) be able to be publicly traded.
gaadd33 12y ago
Are there any downsides to not following the publication requirements? From my research the only limitation (which wasn't even conclusive) was the ability to sue may be hampered until such a time that you comply with the publication requirement.
- mjolk 12y ago
  The law goes all bogeyman here, but one thing is clear: If you get busted for not publishing, you are no longer in good standing as an LLC in the state of New York. You then have to publish to get back in good standing. This doesn't affect the terms your past or current contracts, but it does mean that you can't take contracts with government agencies and some potential clients will research your company and see that you're non-compliant. This can lead to a loss of business and the terms of most of contracts (that I've come across, at least) stipulate that you must be a valid LLC in good-standing -- if you go ahead and sign that contract, you're operating counter to the terms that you've entered into and may be liable for damages to the other party (or your actions could invalidate their responsibilities to you). Note that severability clauses do not cover you in this instance because publication is a legal requirement of the state. And you're right -- you can't sue others as an LLC or fully defend your contracts in a court of law while behind on your liabilities. You're also not technically supposed to do business while non-compliant. disclaimer: not a lawyer, but it's not my first time at the rodeo and this stuff isn't that complex

by mjolk 12y ago

will_brown 12y ago

Check out this old comment I posted: https://news.ycombinator.com/item?id=7031842 https://news.ycombinator.com/item?id=7031842 I described a hack my old employer (a law firm) utilized to accomplish the NY LLC publication requirement. Pretty cost effective, total was $519.90 to organize/file the LLC with the NY Secretary of State and complete the publication requirement.

mjolk 12y ago
I know about that hack, but I'm not sure I'd advise others to follow suit. You end up spending a non-trivial amount of money in fees and there's definitely a legal and time cost involved. IIRC, there's a couple of other issues that are pretty trivial for a law firm to smooth out, but not something you'd want to deal with if you're paying your legal costs per engagement or hour. For what it's worth: "this runs counter to the general principal of SV where they are pro-Corp." I believe this is because in California, there's a minimum tax of $800 on LLCs, so you might as well become a big boy corporation and not eat the 13.3% profit fee, get lower taxes (and/or or tax "hacks" (cheats)), and (especially pertinent to VCs) be able to be publicly traded.

gaadd33 12y ago

Are there any downsides to not following the publication requirements? From my research the only limitation (which wasn't even conclusive) was the ability to sue may be hampered until such a time that you comply with the publication requirement.

mjolk 12y ago
The law goes all bogeyman here, but one thing is clear: If you get busted for not publishing, you are no longer in good standing as an LLC in the state of New York. You then have to publish to get back in good standing. This doesn't affect the terms your past or current contracts, but it does mean that you can't take contracts with government agencies and some potential clients will research your company and see that you're non-compliant. This can lead to a loss of business and the terms of most of contracts (that I've come across, at least) stipulate that you must be a valid LLC in good-standing -- if you go ahead and sign that contract, you're operating counter to the terms that you've entered into and may be liable for damages to the other party (or your actions could invalidate their responsibilities to you). Note that severability clauses do not cover you in this instance because publication is a legal requirement of the state. And you're right -- you can't sue others as an LLC or fully defend your contracts in a court of law while behind on your liabilities. You're also not technically supposed to do business while non-compliant. disclaimer: not a lawyer, but it's not my first time at the rodeo and this stuff isn't that complex