A welfare bill for New York newspapers? It may sound like a bad joke, but the up-to-$140 million in legal-notice pork that could come from a new business incorporation law recently signed by New York Governor Mario Cuomo should keep the state's newspapers well fed. And that could be important in an election year when Cuomo, facing stiff Republican opposition, needs all the media friends he can get.
Spurred by The New York Law Journal and other state newspapers, the law requires newly established limited liability companies--which receive the preferential tax treatment of partnerships while limiting owners' liability, much like corporations--to publish legal notices in two local New York papers for six weeks. That can total about $2,000 per LLC in pricey New York City, for example. And since the Cuomo camp and local accountants' groups expect 40,000 to 70,000 LLCs to be formed statewide within five years, New York newspapers could be in for a windfall.
Cuomo's staff argues such extensive notice is needed to inform the public about the identities of persons who form companies. But many New York lawyers and accountants contend that the rarely read notices are of little benefit--except to newspapers.