The New York legislature passed the LLC Transparency Act (Bill No.: A03484A) on June 20. According to the Bill Memo, the bill aims to end the practice of anonymous ownership of limited liability companies in New York by defining beneficial ownership, requiring the disclosure of the identities of beneficial owners upon company formation or registration, and publishing beneficial owners of limited liability companies in New York’s publicly searchable business entity database. The Memo goes on to state that “[a]nonymous LLCs leasing real property are correlated with more numerous code violations, higher rents, and more evictions compared to non-corporate owners.” According to Commercial Observer, Assembly member Emily Gallagher of Brooklyn introduced the LLC Transparency Act and State Senator Brad Hoylman sponsored the bill in the Senate. Globest.com reports that the bill, which drew support from trade unions and public policy groups, is expected to be signed by Gov. Kathy Hochul.

The bill adopts the same standards promulgated by the Treasury Department pursuant to the Corporate Transparency Act and requires that the same information also be filed with New York’s Department of State, according to the Memo, which notes that the bill creates a waiver process “[t]o protect genuine privacy interests that some individuals may have”. A key difference between the LLC Transparency Act and the federal statute (Corporate Transparency Act) is that FinCEN’s database is held private in a confidential, encrypted database, whereas New York is creating a publicly available database on the NY Secretary of State’s website, according to Globest.com.

Last Updated on June 26, 2023 by Ramin Seddiq