New York Governor Signs LLC Transparency Act to Boost Accountability

New York Governor Kathy Hochul has signed the LLC Transparency Act into law.

This legislation, known as Legislation S.995B/A.3484, establishes a comprehensive database of beneficial owners for Limited Liability Corporations (LLCs), accessible to government agencies and law enforcement in an attempt to address concerns regarding unlawful conduct while respecting privacy rights.

"Bad actors have long taken advantage of the loose disclosure requirements surrounding LLC ownership," Governor Hochul emphasized. "Issues such as wage theft, money laundering, tenant mistreatment, and other unlawful activities have been able to thrive behind the opaque ownership structure of LLCs."

Hochul stated that "The new LLC Transparency Act will empower law enforcement and state regulators to hold these bad actors accountable."

The legislation will create an LLC beneficial ownership database that can be accessed by federal, state, and local law enforcement agencies across New York. By providing these entities with the necessary tools to combat criminal activity, which was previously shrouded in secrecy, the LLC Transparency Act hopes to be a step toward a more transparent and just business environment.

Under the provisions of the legislation, individuals who currently own LLCs or form new ones are required to disclose the names of beneficial owners in their filings, provided they meet the disclosure requirements. This step will help identify those who may be involved in illicit activities and ensure that they are appropriately investigated and prosecuted.

State Senator Brad Hoylman-Sigal applauded Governor Hochul's commitment to signing the LLC Transparency Act, acknowledging its implications for cracking down on tax evasion, unscrupulous landlords, and employers engaged in wage theft across New York.

Hoylman-Sigal emphasized the significance of providing regulators and prosecutors with crucial beneficial ownership information for limited liability corporations, information that has previously been difficult to obtain.

Assemblymember Emily Gallagher also commended Governor Hochul's leadership in signing the LLC Transparency Act, positioning New York as a national leader in addressing the rise of anonymous shell companies that exploit tenants, workers, and defraud businesses and the government.

The LLC Transparency Act underscores the state's commitment to integrity in business practices while protecting the rights and privacy of legitimate LLC owners. By curbing illicit activities and enhancing regulatory oversight, this legislation paves the way for a more equitable and responsible business environment in New York.