Bill Text: NY A09415 | 2021-2022 | General Assembly | Amended
Bill Title: Relates to the disclosure of beneficial owners of limited liability companies and certain information about such beneficial owners.
Spectrum: Partisan Bill (Democrat 15-0)
Status: (Introduced - Dead) 2022-05-25 - amended on third reading 9415c [A09415 Detail]
Download: New_York-2021-A09415-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 9415--C Cal. No. 628 IN ASSEMBLY March 7, 2022 ___________ Introduced by M. of A. GALLAGHER, MITAYNES, GONZALEZ-ROJAS, L. ROSEN- THAL, EPSTEIN, KIM, THIELE, GALEF, GOTTFRIED, MAMDANI, SIMON, DAVILA, FORREST -- read once and referred to the Committee on Corporations, Authorities and Commissions -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- again reported from said committee with amendments, ordered reprinted as amended and recommitted to said committee -- reported from commit- tee, advanced to a third reading, amended and ordered reprinted, retaining its place on the order of third reading AN ACT to amend the limited liability company law, in relation to the disclosure of beneficial owners of limited liability 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 a new subdivision (ii) to read as follows: 5 (ii) (1) "Beneficial owner" means a natural person who, directly or 6 indirectly, (A) holds a membership interest in a limited liability 7 company; (B) exercises substantial control over the decisions of a 8 membership interest in a limited liability company; or (C) has been 9 assigned a membership interest in a limited liability company. For the 10 purposes of this subdivision and for any references to beneficial owners 11 of any limited liability company, the term "limited liability company" 12 shall include, where applicable, foreign limited liability companies and 13 authorized foreign limited liability companies. 14 (2) The term "beneficial owner" shall not include: (A) a minor child; 15 (B) a person acting as a nominee, intermediary, custodian, or agent on 16 behalf of another person; (C) a person acting solely as an employee of a 17 limited liability company and whose control over or economic benefits 18 from the limited liability company derives solely from the employment 19 status of the person; (D) a person whose only interest in a limited 20 liability company is through a right of inheritance, unless the person 21 also meets the requirements of paragraph one of this subdivision; (E) a EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD13266-17-2A. 9415--C 2 1 creditor of a limited liability company, unless the creditor also meets 2 the requirements of paragraph one of this subdivision; or (F) any 3 natural person whose membership interest in a limited liability company 4 derives solely from his or her employment by such limited liability 5 company and such limited liability company's organization as an employ- 6 ee-owned business or worker cooperative, as evidenced by such limited 7 liability company's by-laws or articles of organization. 8 (3) If a beneficial owner of a limited liability company indirectly 9 meets the requirements of subparagraph (A), (B), or (C) of paragraph one 10 of this subdivision, and such company is required to disclose its bene- 11 ficial owners to the department of state or department of taxation and 12 finance, such beneficial owner shall identify each and every entity or 13 person linking such beneficial owner to the limited liability company, 14 including by identifying every intermediary by name and explaining the 15 nature of the legal or economic relationship of the beneficial owner to 16 each such intermediary and how each such intermediary is linked to every 17 other intermediary and to the limited liability company. The beneficial 18 owner may be permitted or required to provide a diagram to meet this 19 disclosure requirement. If indirect beneficial ownership is exercised 20 through a publicly traded entity, a REIT, a UPREIT, or a mutual fund, 21 the requirements of this paragraph shall only apply to beneficial owners 22 holding or controlling twenty-five percent or more of the equity in such 23 limited liability company. This subdivision shall apply until full 24 disclosure of beneficial ownership by natural persons is achieved. 25 (4) If indirect beneficial ownership is exercised through a trust or 26 similar arrangement which holds or controls, directly or indirectly, 27 twenty-five percent or more of the equity in the limited liability 28 company or exercises substantial control over such company, the limited 29 liability company shall identify as a beneficial owner each natural 30 person serving as: (A) a trustee of the trust, a trust protector, or any 31 other individual with authority, directly or indirectly, to dispose of 32 trust income, assets, or principal; (B) a trust beneficiary with the 33 right, directly or indirectly, to receive, demand, or withdraw any trust 34 income, assets, or principal; and (C) a grantor or settlor with the 35 right, directly or indirectly, to revoke the trust or to receive, 36 demand, or withdraw trust income, assets or principal. 37 § 3. Paragraphs 6 and 7 of subdivision (e) of section 203 of the 38 limited liability company law, as added by chapter 470 of the laws of 39 1997, are amended to read as follows: 40 (6) if all or specified members are to be liable in their capacity as 41 members for all or specified debts, obligations or liabilities of the 42 limited liability company as authorized pursuant to section six hundred 43 nine of this chapter, a statement that all or specified members are so 44 liable for such debts, obligations or liabilities in their capacity as 45 members of the limited liability company as authorized pursuant to 46 section six hundred nine of this chapter; [and] 47 (7) a document identifying the beneficial owners of the limited 48 liability company in accordance with subdivision (a) of section two 49 hundred fifteen of this article; and 50 (8) any other provisions, not inconsistent with law, that the members 51 elect to include in the articles [or] of organization for the regulation 52 of the internal affairs of the limited liability company, including, but 53 not limited to, (A) the business purpose for which the limited liability 54 company is formed, (B) a statement of whether there are limitations on 55 the authority of members or managers or a class or classes thereof to 56 bind the limited liability company and (C) any provisions that areA. 9415--C 3 1 required or permitted to be included in the operating agreement of the 2 limited liability company pursuant to section four hundred seventeen of 3 this chapter. 4 § 4. Paragraphs 8, 9 and 10 of subdivision (d) of section 211 of the 5 limited liability company law, paragraph 10 as added by section 18 of 6 part KK of chapter 56 of the laws of 2021, are amended and a new para- 7 graph 11 is added to read as follows: 8 (8) the discovery of a materially false or inaccurate statement in the 9 articles of organization; [and] 10 (9) the decision to change any other statement in the articles of 11 organization[.]; 12 (10) to specify, change or delete the email address to which the 13 secretary of state shall email a notice of the fact that process against 14 the limited liability company has been electronically served upon him or 15 her[.]; and 16 (11) a change in the beneficial owners of such limited liability 17 company or the information required to be provided relating to each 18 beneficial owner pursuant to section two hundred three of this article. 19 § 5. The limited liability company law is amended by adding a new 20 section 215 to read as follows: 21 § 215. Beneficial ownership disclosure. (a) A limited liability 22 company, when disclosing its beneficial owners, shall identify each 23 beneficial owner by: (1) name; (2) date of birth; (3) current residen- 24 tial or business street address; (4) a unique identifying number from a 25 non-expired passport issued by the United States or a non-expired driv- 26 er's license or identification card issued by this or another state 27 or, if none, a legible and credible copy of the pages of a non-expired 28 foreign passport bearing a photograph, date of birth, and unique iden- 29 tifying information for the beneficial owner; (5) a federal or state 30 taxpayer identification number or, if none, a legal entity identifier 31 issued by the Global Legal Entity Identifier Foundation. 32 (b) A limited liability company, when disclosing its beneficial owners 33 to the department of state or department of taxation and finance, may 34 submit a copy of the beneficial ownership information such company 35 submitted to the federal government pursuant to 31 U.S.C. section 5336 36 in order to satisfy state disclosure requirements, provided that such 37 federal registration is current and contains all information required by 38 state law. 39 (c) The identification and disclosure of the name, business address, 40 and year of birth of a beneficial owner shall not be deemed an unwar- 41 ranted invasion of personal privacy pursuant to article six of the 42 public officers law. All other personal or identifying information of 43 such beneficial owner shall be deemed confidential except for the 44 purposes of law enforcement. If confidential information associated with 45 a beneficial owner is held electronically, such records shall be 46 encrypted. 47 § 6. Paragraphs 7 and 8 of subdivision (a) of section 802 of the 48 limited liability company law are amended and a new paragraph 9 is added 49 to read as follows: 50 (7) a statement that the foreign limited liability company is in 51 existence in the jurisdiction of its formation at the time of the filing 52 of such application; [and] 53 (8) the name and address of the authorized officer in the jurisdiction 54 of its formation where a copy of its articles of organization is filed 55 or, if no public filing of its articles of organization is required by 56 the law of the jurisdiction of formation, a statement that the foreignA. 9415--C 4 1 limited liability company shall provide, on request, a copy thereof with 2 all amendments thereto (if such documents are in a foreign language, a 3 translation in English thereof under oath of the translator shall be 4 attached thereto), and the name and post office address of the person 5 responsible for providing such copies[.]; and 6 (9) a document identifying the beneficial owners of the foreign limit- 7 ed liability company in accordance with subdivision (a) of section eight 8 hundred ten of this article. 9 § 7. Section 804 of the limited liability company law is amended by 10 adding a new subdivision (c) to read as follows: 11 (c) Every foreign limited liability company that has received a filing 12 receipt entitled "Certificate of authority of .... (name of foreign 13 limited liability company) under section eight hundred five of the 14 Limited Liability Company Law," evidencing authority as provided herein 15 shall amend its application for authority upon a change in beneficial 16 ownership or the information required to be provided relating to each 17 beneficial owner pursuant to section eight hundred two of this 18 article within ninety days of such change. 19 § 8. The limited liability company law is amended by adding a new 20 section 810 to read as follows: 21 § 810. Beneficial ownership disclosure. (a) A foreign limited liabil- 22 ity company, when disclosing its beneficial owners, shall identify each 23 beneficial owner by: (1) name; (2) date of birth; (3) current residen- 24 tial or business street address; (4) a unique identifying number from a 25 non-expired passport issued by the United States or a non-expired driv- 26 er's license or identification card issued by this or another state 27 or, if none, a legible and credible copy of the pages of a non-expired 28 foreign passport bearing a photograph, date of birth, and unique iden- 29 tifying information for the beneficial owner; (5) a federal or state 30 taxpayer identification number or, if none, a legal entity identifier 31 issued by the Global Legal Entity Identifier Foundation. 32 (b) A foreign limited liability company, when disclosing its benefi- 33 cial owners to the department of state or department of taxation and 34 finance, may submit a copy of the beneficial ownership information such 35 company submitted to the federal government pursuant to 31 U.S.C. 36 section 5336 in order to satisfy state disclosure requirements, provided 37 that such federal registration is current and contains all information 38 required by state law. 39 (c) The identification and disclosure of the name, business address, 40 and year of birth of a beneficial owner shall not be deemed an unwar- 41 ranted invasion of personal privacy pursuant to article six of the 42 public officers law. All other personal or identifying information of 43 such beneficial owner shall be deemed confidential except for the 44 purposes of law enforcement. If confidential information associated with 45 a beneficial owner is held electronically, such records shall be 46 encrypted. 47 § 9. This act shall take effect on the three hundred sixty-fifth day 48 after it shall have become a law; provided further, however, that if 49 part KK of chapter 56 of the laws of 2021 shall not have taken effect on 50 or before such date then section four of this act shall take effect on 51 the same date and in the same manner as such part of such chapter of the 52 laws of 2021 takes effect. Effective immediately, the addition, amend- 53 ment and/or repeal of any rule or regulation necessary for the implemen- 54 tation of this act on its effective date are authorized to be made and 55 completed on or before such effective date.