1 of 1 HOUSE DOCKET, NO. 2389 FILED ON: 1/16/2025 HOUSE . . . . . . . . . . . . . . . No. 501 The Commonwealth of Massachusetts _________________ PRESENTED BY: Erika Uyterhoeven _________________ To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General Court assembled: The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill: An Act to ensure LLC transparency. _______________ PETITION OF: NAME:DISTRICT/ADDRESS :DATE ADDED:Erika Uyterhoeven27th Middlesex1/16/2025 1 of 6 HOUSE DOCKET, NO. 2389 FILED ON: 1/16/2025 HOUSE . . . . . . . . . . . . . . . No. 501 By Representative Uyterhoeven of Somerville, a petition (accompanied by bill, House, No. 501) of Erika Uyterhoeven relative to limited liability companies. Economic Development and Emerging Technologies. The Commonwealth of Massachusetts _______________ In the One Hundred and Ninety-Fourth General Court (2025-2026) _______________ An Act to ensure LLC transparency. Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows: 1 SECTION 1. Section 2 of chapter 156C of the General Laws, as appearing in the 2022 2Official Edition, is hereby amended by inserting after clause (1) the following clause:- 3 (1½) “Beneficial owner”, a person who, directly or indirectly: (i) holds a membership 4interest in a limited liability company or foreign limited liability company; (ii) exercises 5substantial control over the decisions of a membership interest in a limited liability company or 6foreign limited liability company; or (iii) has been assigned a membership interest in a limited 7liability company or foreign limited liability company. A beneficial owner shall also include any 8ultimate beneficial owner regardless of the place of registration of the limited liability company. 9 A beneficial owner shall not include: (i) a minor child; (ii) a person acting as a nominee, 10intermediary, custodian or agent on behalf of another person; (iii) a person acting solely as an 11employee of a limited liability company or foreign limited liability company and whose control 12over or economic benefits from the limited liability company or foreign limited liability 2 of 6 13company derives solely from the employment status of the person; (iv) a person whose only 14interest in a limited liability company or foreign limited liability company is through a right of 15inheritance unless, the person meets the beneficial owner requirements in this chapter; (v) a 16creditor of a limited liability company or foreign limited liability company unless, the creditor 17meets the beneficial owner requirements in this subsection; (vi) any person whose member 18interest in a limited liability company or foreign limited liability company derives solely from 19their employment by such limited liability company or foreign limited liability company; and 20(vii) any person whose member interest in a limited liability company or foreign limited liability 21company derives solely from a limited liability company’s certificate of organization in sections 2212 or 13 or a foreign limited liability company’s application for registration in sections 48 or 52. 23 SECTION 2. Subsection (a) of section 12 of said chapter 156C, as so appearing, is hereby 24amended by adding the following subparagraph:- 25 (10) the disclosure of each beneficial owner of the limited liability company. 26 SECTION 3. Section 13 of said chapter 156C, as so appearing, is hereby amended by 27adding the following subsection:- 28 (f) A certificate of organization shall be amended to reflect a change in the beneficial 29owners of a limited liability company or the information required to be provided relating to each 30beneficial owner. 31 SECTION 4. The second paragraph of section 48 of said chapter 156C, as so appearing, 32is hereby amended by adding the following subparagraph:- 33 (10) the disclosure of each beneficial owner of the foreign limited liability company. 3 of 6 34 SECTION 5. Said chapter 156C is hereby amended by striking out section 52, as so 35appearing, and inserting in place thereof the following section:- 36 Section 52. (1) If any statement in the application for registration of a foreign limited 37liability company was false when made or any arrangements or other facts described have 38changed, making the application inaccurate in any respect, the foreign limited liability company 39shall promptly file in the office of the state secretary a certificate, signed and sworn to by an 40authorized person, correcting or amending such statement. 41 (2) An application for registration shall be amended to reflect a change in the beneficial 42owners of a foreign limited liability company or the information required to be provided relating 43to each beneficial owner. The amended application for registration shall be filed with the state 44secretary within 30 days of the beneficial owner change of the foreign limited liability company. 45 SECTION 6. Said chapter 156C, as so appearing, is hereby amended by adding the 46following section:- 47 Section 73. (a)(1) A limited liability company shall disclose its beneficial owners to the 48state secretary. The beneficial owner shall identify each and every entity or person linking such 49beneficial owner to the limited liability company, including: (i) identifying every intermediary 50by name and explaining the nature of the legal or economic relationship of the beneficial owner 51to each such intermediary; and (ii) how each such intermediary is linked to every other 52intermediary and to the limited liability company. The state secretary may permit or require the 53beneficial owner to provide a diagram in order to meet the disclosure requirement. 54 (2) Disclosure requirements of this section shall only apply to beneficial owners if: (i) 55indirect beneficial ownership is exercised through a publicly traded entity, a REIT, a UPREIT or 4 of 6 56a mutual fund; and (ii) the beneficial owner is holding or controlling 25 per cent or more of the 57equity in such limited liability company. This subsection shall apply until full disclosure of a 58beneficial owner by person is achieved. 59 (3) If a beneficial owner indirectly exercises ownership through a trust or similar 60arrangement which holds or controls, directly or indirectly, 25 per cent or more of the equity in 61the limited liability company or exercises substantial control over such company, the limited 62liability company shall identify as a beneficial owner each person serving as: 63 (i) a trustee of the trust, a trust protector or any other individual with authority, directly or 64indirectly, to dispose of trust income, assets or principal; 65 (ii) a trust beneficiary with the right, directly or indirectly, to receive, demand or 66withdraw any trust income, assets or principal; and 67 (iii) a grantor or settlor with the right, directly or indirectly, to revoke the trust or to 68receive, demand or withdraw trust income, assets or principal. 69 (b)(1) A limited liability company, when disclosing its beneficial owners pursuant to 70sections 12 and 13, shall identify each beneficial owner by: (i) name; (ii) date of birth; (iii) their 71current residential or business address; (iv) a unique identifying number from a non-expired 72United States passport or a non-expired driver's license or identification card issued by the 73commonwealth or another state or a non-expired foreign passport bearing a photograph, date of 74birth and unique identifying information for the beneficial owner; and (5) a federal or state 75 taxpayer identification number or a legal entity identifier issued by the global legal entity 76identifier foundation. 5 of 6 77 (2) A limited liability company, when disclosing its beneficial owners to the state 78secretary, may submit a copy of the beneficial ownership information submitted to the federal 79government pursuant to 31 U.S.C. §5336 in order to satisfy disclosure requirements; provided, 80that such federal registration is current and contains all information required under this section. 81 (3) A limited liability company, when disclosing its beneficial owners pursuant to 82sections 12 and 13, shall identify the total number of properties, if any, each beneficial owner 83owns in the commonwealth and the city or town each property is located in the commonwealth. 84 (c)(1) A foreign limited liability company, when disclosing its beneficial owners pursuant 85to sections 48 and 52, shall identify each beneficial owner by: (i) name; (ii) date of birth; (iii) 86their current residential or business address; (iv) a unique identifying number from a non-expired 87United States passport or a non-expired driver's license or identification card issued by the 88commonwealth or another state or a non-expired foreign passport bearing a photograph, date of 89birth and unique identifying information for the beneficial owner; and (5) a federal or state 90taxpayer identification number or a legal entity identifier issued by the global legal entity 91identifier foundation. 92 (2) A foreign limited liability company, when disclosing its beneficial owners to the state 93secretary, may submit a copy of the beneficial ownership information submitted to the federal 94government pursuant to 31 U.S.C. §5336 in order to satisfy disclosure requirements, provided 95that such federal registration is current and contains all information required under this section. 96 (3) A foreign limited liability company, when disclosing its beneficial owners pursuant to 97sections 12 and 13, shall identify the total number of properties, if any, each beneficial owner 98owns in the commonwealth and the city or town each property is located in the commonwealth. 6 of 6 99 (d) All disclosed information filed with the state secretary under this section shall be a 100matter of public record and subject to chapter 66.