NY Governor Must Soon Act on Bill to Expose LLC Owners

The clock is ticking on Gov. Kathy Hochul (D) to take action on legislation that would make New York the first state to publicly list the owners behind limited liability companies.

The bill, A3484A, would require LLCs to disclose their beneficial owners and other identifying information, such as their business street address. Those who fail to comply for more than two years would be shown as “delinquent” on state records and subject to a $250 penalty. Entities with “significant privacy interests” could apply for a waiver to not appear in the state registry.

On this episode of Talking Tax, Bloomberg Tax spoke with state Sen. Brad Hoylman-Sigal, the Manhattan Democrat who sponsored the bill, and Chelsea Lemon, director of government affairs for the Business Council of New York, which opposes the legislation.

"The LLC Transparency Act doesn't minimize or alter the legal structure or protections of LLCs, but it provides necessary transparency for the public's benefit, as well as our law enforcement," Hoylman-Sigal said.

Other proponents, including state Attorney General Letitia James and Comptroller Thomas DiNapoli, have said the opaque structure of LLCs allow corrupt actors to hide their financial dealings and contribute to issues like tax evasion and money laundering. Opponents, such as real estate groups, have raised privacy concerns with it and said it will hurt the state's economic competitiveness.

A spokesperson for Hochul said she's "reviewing the legislation." She has until Dec. 31 to act on the bill. 

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