STATE OF NEW YORK ________________________________________________________________________ 3484--A 2023-2024 Regular Sessions IN ASSEMBLY February 3, 2023 ___________ Introduced by M. of A. GALLAGHER, MITAYNES, GONZALEZ-ROJAS, L. ROSEN- THAL, EPSTEIN, KIM, THIELE, MAMDANI, SIMON, DAVILA, FORREST, CARROLL, KELLES, SHRESTHA, GLICK, MAGNARELLI, ROZIC, JACOBSON, SHIMSKY, SILLIT- TI -- read once and referred to the Committee on Corporations, Author- ities and Commissions -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the limited liability company law and the executive law, in relation to the disclosure of beneficial owners of limited liabil- ity companies The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "LLC transparency act". 3 § 2. Section 102 of the limited liability company law is amended by 4 adding four new subdivisions (ii), (jj), (kk) and (ll) to read as 5 follows: 6 (ii) "Beneficial owner" shall have the same meaning as defined in 31 7 U.S.C. § 5336(a)(3), as amended, and any regulations promulgated there- 8 under. 9 (jj) "Initial report" shall mean the report required to be filed 10 pursuant to 31 C.F.R. § 1010.380, as amended. 11 (kk) "Reporting company" shall have the same meaning as defined in 31 12 U.S.C. § 5336(a)(11)(A), as amended, and any regulations promulgated 13 thereunder, but shall only include limited liability companies and 14 foreign limited liability companies. 15 (ll) "Exempt company" shall mean a limited liability company or 16 foreign limited liability company not otherwise defined as a reporting 17 company that meets a condition for exemption enumerated in 31 U.S.C. § 18 5336(a)(11)(B). EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00252-08-3
A. 3484--A 2 1 § 3. Paragraphs 6 and 7 of subdivision (e) of section 203 of the 2 limited liability company law, as added by chapter 470 of the laws of 3 1997, are amended to read as follows: 4 (6) if all or specified members are to be liable in their capacity as 5 members for all or specified debts, obligations or liabilities of the 6 limited liability company as authorized pursuant to section six hundred 7 nine of this chapter, a statement that all or specified members are so 8 liable for such debts, obligations or liabilities in their capacity as 9 members of the limited liability company as authorized pursuant to 10 section six hundred nine of this chapter; [and] 11 (7) in the case of an exempt company, a statement signed by a member 12 or manager indicating the provision or provisions of 31 U.S.C. § 13 5336(a)(11)(B), excluding such company from the definition of a report- 14 ing company to file an initial report, or in the case of a reporting 15 company, the beneficial ownership disclosure information as required 16 pursuant to section two hundred fifteen of this article; and 17 (8) any other provisions, not inconsistent with law, that the members 18 elect to include in the articles [or] of organization for the regulation 19 of the internal affairs of the limited liability company, including, but 20 not limited to, (A) the business purpose for which the limited liability 21 company is formed, (B) a statement of whether there are limitations on 22 the authority of members or managers or a class or classes thereof to 23 bind the limited liability company and (C) any provisions that are 24 required or permitted to be included in the operating agreement of the 25 limited liability company pursuant to section four hundred seventeen of 26 this chapter. 27 § 4. Paragraphs 8, 9 and 10 of subdivision (d) of section 211 of the 28 limited liability company law, paragraph 10 as added by section 18 of 29 part KK of chapter 56 of the laws of 2021, are amended and a new para- 30 graph 11 is added to read as follows: 31 (8) the discovery of a materially false or inaccurate statement in the 32 articles of organization; [and] 33 (9) the decision to change any other statement in the articles of 34 organization[.]; 35 (10) to specify, change or delete the email address to which the 36 [secretary] department of state shall email a notice of the fact that 37 process against the limited liability company has been electronically 38 served upon him or her[.]; and 39 (11) in the case of a reporting company, any change in the information 40 required to be disclosed pursuant to section two hundred fifteen of this 41 article, or where a reporting company has not filed the disclosure 42 required by such section, such company shall file such disclosure at the 43 time of filing such certificate of amendment. 44 § 5. The limited liability company law is amended by adding a new 45 section 215 to read as follows: 46 § 215. Beneficial ownership disclosure. (a) When filing the articles 47 of organization pursuant to section two hundred three of this article or 48 filing an amendment of the articles of organization pursuant to section 49 two hundred eleven of this article, the reporting company shall file 50 with the department of state a beneficial ownership disclosure, and any 51 updates to such information, as may be applicable, identifying each 52 beneficial owner by: (1) full legal name; (2) date of birth; (3) current 53 business street address; and (4) a unique identifying number from an 54 acceptable identification document defined in 31 U.S.C. § 5336 (a)(1). 55 Provided, however, that where an initial report contains the information 56 required herein, a reporting company may submit a copy of the initial
A. 3484--A 3 1 report, submitted to the federal government pursuant to 31 U.S.C. § 2 5336, to satisfy the requirements of this section. 3 (b) All personal or identifying information of beneficial owners 4 provided to the department of state under this section not required to 5 be included in the business entity database pursuant to section one 6 hundred-b of the executive law, shall be deemed confidential except for 7 the purposes of law enforcement, or as otherwise required to be 8 disclosed pursuant to a court order. If confidential information associ- 9 ated with a beneficial owner is held electronically, such records shall 10 be encrypted or protected in a substantially similar manner. The 11 department of state shall, upon the filing of each beneficial ownership 12 disclosure, assign each beneficial owner of a limited liability company 13 an anonymized unique identifying number, which shall not be based on any 14 personally identifying number including but not limited to a social 15 security or tax identification number assigned to or associated with 16 such beneficial owner. 17 (c) (1) Each reporting company formed on or before the effective date 18 of this section shall file the information required under subdivision 19 (a) of this section; and each exempt company formed on or before the 20 effective date of this section shall file a statement signed by a member 21 or manager indicating the provision or provisions of 31 U.S.C. § 22 5336(a)(11)(B), excluding such company from the definition of a report- 23 ing company, with the department of state no later than January first, 24 two thousand twenty-five. 25 (2) A reporting company which has failed to file the beneficial 26 ownership disclosure as required by this section for a period exceeding 27 thirty days shall be shown to be past due on the records of the depart- 28 ment of state until an up-to-date beneficial ownership disclosure is 29 filed with the department. 30 (3) A reporting company which has failed to file the beneficial owner- 31 ship disclosure as required by this section for a period exceeding two 32 years shall be shown to be delinquent on the records of the department 33 of state after a notice of delinquency has been mailed to the last known 34 business address of such reporting company, and such company has failed 35 to file such information within sixty days of the mailing of such 36 notice. Such delinquency shall be removed from the records of the 37 department of state upon the filing of an up-to-date beneficial owner- 38 ship disclosure, and the payment of a civil penalty of two hundred fifty 39 dollars. 40 § 6. Paragraphs 7 and 8 of subdivision (a) of section 802 of the 41 limited liability company law are amended and a new paragraph 9 is added 42 to read as follows: 43 (7) a statement that the foreign limited liability company is in 44 existence in the jurisdiction of its formation at the time of the filing 45 of such application; [and] 46 (8) the name and address of the authorized officer in the jurisdiction 47 of its formation where a copy of its articles of organization is filed 48 or, if no public filing of its articles of organization is required by 49 the law of the jurisdiction of formation, a statement that the foreign 50 limited liability company shall provide, on request, a copy thereof with 51 all amendments thereto (if such documents are in a foreign language, a 52 translation in English thereof under oath of the translator shall be 53 attached thereto), and the name and post office address of the person 54 responsible for providing such copies[.]; and 55 (9) in the case of an exempt company, a statement signed by a member 56 or manager indicating the provision or provisions of 31 U.S.C. §
A. 3484--A 4 1 5336(a)(11)(B), excluding such company from the definition of a report- 2 ing company to file an initial report, or in the case of a reporting 3 company, the beneficial ownership disclosure information required pursu- 4 ant to section eight hundred ten of this article. 5 § 7. Section 804 of the limited liability company law is amended by 6 adding a new subdivision (c) to read as follows: 7 (c) In the case of a foreign limited liability company that is also a 8 reporting company, such reporting company shall amend its application 9 for authority upon any change in the beneficial owner information 10 required pursuant to section eight hundred ten of this article. 11 § 8. The limited liability company law is amended by adding a new 12 section 810 to read as follows: 13 § 810. Beneficial ownership disclosure. (a) When filing the applica- 14 tion for authority pursuant to section eight hundred two of this article 15 or filing any amendments to an application for authority pursuant to 16 section eight hundred four of this article, a reporting company shall 17 file with the department of state a beneficial ownership disclosure, or 18 any updates to such information, as may be applicable, identifying each 19 beneficial owner by: (1) full legal name; (2) date of birth; (3) 20 current business street address; and (4) a unique identifying number 21 from an acceptable identification document defined in 31 U.S.C. § 22 5336(a)(1). Provided, however, that where an initial report contains the 23 information required herein, such foreign limited liability company 24 shall submit a copy of the initial report such company submitted to 25 the federal government pursuant to 31 U.S.C. § 5336 in order to satisfy 26 the requirements of this section. 27 (b) All personal or identifying information of beneficial owners 28 provided to the department of state under this section not required to 29 be included in the business entity database pursuant to section one 30 hundred-b of the executive law, shall be deemed confidential except for 31 the purposes of law enforcement, or as otherwise required to be 32 disclosed pursuant to a court order. If confidential information associ- 33 ated with a beneficial owner is held electronically, such records shall 34 be encrypted or protected in a substantially similar manner. The depart- 35 ment of state shall, upon the filing of each beneficial ownership 36 disclosure, assign each beneficial owner of a foreign limited liability 37 company an anonymized unique identifying number, which shall not be 38 based on any personally identifying number including but not limited to 39 a social security or tax identification number assigned to or associated 40 with such beneficial owner. 41 (c) (1) Each reporting company formed pursuant to section eight 42 hundred two of this chapter, on or before the effective date of this 43 section shall file the information required under subdivision (a) of 44 this section; and each exempt company shall file a statement signed by a 45 member or manager indicating the provision or provisions of 31 U.S.C. § 46 5336(a)(11)(B) excluding such company from the definition of a reporting 47 company, with the department of state no later than January first, two 48 thousand twenty-five. 49 (2) A reporting company which has failed to file its beneficial 50 ownership disclosure as required by this section, for a period exceed- 51 ing thirty days, shall be shown to be past due on the records of the 52 department of state until an up-to-date beneficial ownership disclosure 53 is filed with the department. 54 (3) A reporting company which has failed to file its beneficial owner- 55 ship disclosure as required by this section for a period exceeding two 56 years shall be shown to be delinquent on the records of the department
A. 3484--A 5 1 of state after a notice of delinquency has been mailed to the last 2 known business address of such company and such company has failed to 3 file such information within sixty days of the mailing of such notice. 4 Such delinquency shall be removed from the records of the department of 5 state upon the filing of an up-to-date beneficial ownership disclosure 6 required by this section, and the payment of a civil penalty of two 7 hundred fifty dollars. 8 § 9. The executive law is amended by adding a new section 100-b to 9 read as follows: 10 § 100-b. Business entity database. 1. The secretary of state shall 11 maintain a publicly available database on its website for each business 12 entity organized in New York state and each foreign business entity with 13 authority to do business in the state, that includes but is not 14 limited to, the following information: 15 (a) the name of the business entity; 16 (b) the history of such name and changes to such name, where applica- 17 ble; 18 (c) the current business street address and the county associated with 19 such business street address; 20 (d) the duration or date of dissolution of the business entity, where 21 applicable; 22 (e) where the business entity is a limited liability company, the date 23 of initial filing of the articles of organization, or where the 24 business entity is a foreign limited liability company, the application 25 for authority; 26 (f) the date of the most recent filing; 27 (g) the filing history associated with such entity; and 28 (h) any other information pertaining to such business entity as may be 29 determined by the secretary of state and in accordance with applicable 30 state and federal laws, rules, and regulations. 31 2. (a) In addition to the information required to be included in the 32 database pursuant to subdivision one of this section, the secretary of 33 state shall also include the full legal name or names of each beneficial 34 owner, for every limited liability company and foreign limited liability 35 company where such companies are also reporting companies. 36 (b) The secretary of state shall establish, through regulations, 37 procedures to allow beneficial owners of limited liability companies 38 and foreign limited liability companies who are also reporting companies 39 who cite significant privacy interests to apply for a waiver to withhold 40 the name and/or business address associated of a beneficial owner from 41 the database established in subdivision one of this section where such 42 name and/or business address discloses personal or identifying informa- 43 tion of such beneficial owner, no amendment to such information miti- 44 gates such disclosure, and such disclosure serves no public interest. 45 Significant privacy interests shall include, but not be limited to, 46 where a beneficial owner is a natural person participating in an address 47 confidentiality program, or is a member of a limited liability compa- 48 ny acting as a relator in a qui tam action filed pursuant to section one 49 hundred ninety of the state finance law or 31 U.S.C. section 3729. The 50 secretary of state shall issue a waiver to a beneficial owner upon a 51 demonstration that a significant privacy interest exists and shall 52 provide guidance on its website indicating what documentation is accept- 53 able as proof for issuance of a waiver. If the secretary of state grants 54 a beneficial owner a waiver pursuant to this subdivision, the secretary 55 of state shall disclose the anonymized unique identifying number 56 assigned by the secretary of state to each beneficial owner or owners
A. 3484--A 6 1 pursuant to section two hundred fifteen or section eight hundred ten 2 of the limited liability company law, as may be applicable to the 3 database established in subdivision one of this section. The secretary 4 of state shall also provide information on its website regarding compli- 5 ance with beneficial ownership disclosure requirements and how and where 6 such information may be used and disclosed. 7 § 10. This act shall take effect on the three hundred sixty-fifth day 8 after it shall have become a law. Effective immediately, the addition, 9 amendment and/or repeal of any rule or regulation necessary for the 10 implementation of this act on its effective date are authorized to be 11 made and completed on or before such effective date.