Pursuant to the New York State Wage Theft Prevention Act, effective February 1, 2012, New York employers are now required to give annual notice to their employees of wage information, including:

His or her regular rate(s) of pay and overtime rates of pay (if applicable);
The basis of the employee’s wage rate (i.e. hourly, weekly, salary, commission, other);
Any allowances claimed against the minimum wage (tip credit, meal credit, lodging allowances, etc.);
The employer’s principal place of business, and mailing address (if different);
The employer’s telephone number; and
Additional employer information, such as the official name of the business and all “doing business as” names.
Employers are also required to obtain signed acknowledgements from each employee which memorialize the employee’s receipt of his or her wage notice. These signed acknowledgements must be retained by employers for six years.
This Notice requirement is an important law with significant penalties for non-compliance. Any new employee not provided with the notice within 10 business days of his or her start date may bring a claim to recover $50 for each workweek that a violation occurs and may recover up to $2,500, plus attorneys’ fees. For statutory violations relating to a current employee, the employer may be liable for damages of up to $100 per week and may recover up to $2,500, plus attorneys’ fees.

They both afford the owner(s) the advantage of limited liability and are both pass through entities for tax purposes (i.e. The entities both declare their profits and losses on the individual owners tax returns without the need for the entity to pay a separate tax for such income). Given the strong similarities between the two entities, choosing amongst the two is often a difficult task. As such, as a restaurant and bar attorney in New York, I am repeatedly asked this question by clients.

GENERAL RULE: Choose a Limited Liability Company over the other choice of entities when opening a new restaurant, bar or hotel in New York.

While the two have very strong similarities, they are not without their differences. For example, S-Corporations are subject to stringent corporate formalities such as holding annual corporate meetings, keeping the minutes of the meetings, appointing corporate officers to serve, and issuing corporate stock to owner’s which may often be difficult to sell and/or transfer. In contrast, an LLC does not require annual meetings, appointing officers, the recording of meeting minutes, or the issuance of stock. Moreover, profits and losses distributed by an LLC need not be made in proportion to ownership share. However, in contrast, if an S-Corporation owner owns 50% of the shares, he/she MUST receive 50% of the profits and/or losses.

Additionally, the amount of S-Corporation shareholders cannot exceed 100 and all must be U.S. citizens or permanent residents. An LLC does not have these restrictions either.

A downside to forming an LLC is the publication requirement. Within 120 days after the filing of the initial articles of organization, notice must be published once each week for six successive weeks, in two newspapers of the county in which the office of the LLC is located (one newspaper to be printed weekly and one newspaper to be printed daily; both need be designated by the county clerk). If the LLC is located in New York City, this publication will cost about $1,100.00. By contrast, an S-Corporation does not have any publication requirement. This publication cost is the main disincentive to choosing an LLC when doing business in New York, but in the end, if you plan on being in business for the next 10+ years, given the flexibility of the LLC entity, this additional cost is worth it.

GENERAL RULE: Yes. Bars, restaurants and other eating and drinking establishments with a lawful occupancy of less than 75 persons are regulated by the Fire Code as a “public gathering place and do require an open flame permit for candles and sternos, amongst other combustible things.

The regulations governing the use of open flames and Liquid Propane Gas (LPG) apply to eating and drinking establishments whether they are large enough to be classified as a place of assembly (75 or more people) or are regulated as a public gathering place. Among other things, the law regulates the preparation of flaming foods and beverages, and the use of candles and combustible liquids in tabletop lamps and other open-flame decorative devices; solid alcohol for food warming (Sternos); and charcoal for cooking in hibachis.

Permits for open flames are issued by the Fire Departments Bureau of Fire Prevention upon completion of a satisfactory inspection of the premises. Permits are normally issued for a period of one year and must be renewed upon expiration.