Archive for April, 2018

Apr 19 2018

Should my New York based business be a Delaware LLC?

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The answer is very a simple and unequivocal, NO.  I decided to write this post because I get asked that question at least once a month and there is a lot of misinformation on the subject.

Despite the correct answer being NO, many lawyers and accountants still advise otherwise based on their lack of understanding about how the NY tax code and jurisdiction laws works. While it is true that Delaware taxes and laws are more beneficial to employers than New York taxes and laws, NY based businesses however don’t get any of that benefit.  In fact, if you form a Delaware LLC for your New York business, you will be required to file tax returns in both states and make additional filings in NY such as an application for authority for a foreign business. You will also be required to maintain a registered agent in DE which will come at an additional cost to you.

If your business is in NY, you will be required to pay NY taxes regardless of where you choose to form your LLC.  Further, if you do form your LLC in Delaware but operate in NY, you will subject to NY jurisdiction and law for any legal claim that arises in NY (absent a contract claim where the contract contains a DE jurisdiction and choice of law provision).

Thus, there is no tax benefit and (in almost every conceivable scenario) there is no legal benefit for forming your New York based business as a Delaware LLC.

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Apr 16 2018

Stop Sexual Harassment in NYC Act Enacted

On April 11, 2018, the New York City Council enacted a package of legislation referred to as the “Stop Sexual Harassment in NYC Act,” described by the City Council as critical to creating safe workplaces in New York City.

The Stop Sexual Harassment in NYC Act passed one day after New York Gov. Andrew Cuomo signed the Budget Bill, which contains a new state law requiring employers to conduct annual anti-sexual harassment training. New York City employers must comply with both state and city training requirements.

Whereas the NYCHRL generally covers employers with four (4) or more employees, all New York City employers, regardless of the number of individuals they employ, will be subject to the NYCHRL with respect to only sexual harassment. Thus, for sexual harassment claims only, the law expands the definition of employer to include all New York City businesses and entities that employ at least one individual within New York City.

The Stop Sexual Harassment in NYC Act also expands the statute of limitations period for sexual harassment claims. Under the NYCHRL, aggrieved individuals have one year from the alleged discriminatory practice to file a complaint with the New York City Commission on Human Rights and three (3) years from the alleged incident to file a claim in court. Effective immediately, the new law allows individuals up to three (3) years to file sexual harassment claims with either the City Commission or in court; the statute of limitations period for all other discrimination or harassment claims remains unchanged.

In addition, within 120-days after the Mayor signs the Stop Sexual Harassment in NYC Act into law, the City Commission must create anti-sexual harassment posters in both English and Spanish. New York City employers will be required to post both the English and Spanish versions of the posters with other workplace postings.

Finally, as of April 1, 2019, all private employers with fifteen (15) or more employees in New York City will be required to conduct annual anti-sexual harassment interactive training. The City Commission is charged with creating interactive training programs. Employers can use the model training programs created by the City Commission to satisfy the training requirements set forth in the Stop Sexual Harassment in NYC Act, or they can implement their own policies and training programs provided that such policies and programs equal or exceed the minimum standards set by City Commission.

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