S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8662
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 23, 2025
                                ___________
 
 Introduced  by  M.  of  A.  GALLAGHER  --  read once and referred to the
   Committee on Corporations, Authorities and Commissions
 
 AN ACT to amend the limited liability company law, in  relation  to  the
   scope  of  certain provisions relating to beneficial owners of limited
   liability companies

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivisions (a), (b) and (c) of section 1106 of the limit-
 ed  liability  company law, as added by chapter 102 of the laws of 2024,
 are amended and a new subdivision (e) is added to read as follows:
   (a) "Beneficial owner" shall [have the same meaning as defined  in  31
 U.S.C.  § 5336(a)(3), as amended, and any regulations promulgated there-
 under] MEAN, WITH RESPECT TO ANY ENTITY OR INDIVIDUAL WHO,  DIRECTLY  OR
 INDIRECTLY,  THROUGH ANY CONTRACT, ARRANGEMENT, UNDERSTANDING, RELATION-
 SHIP, OR OTHERWISE:
   (1) EXERCISES SUBSTANTIAL CONTROL OVER THE ENTITY; OR
   (2) OWNS OR CONTROLS NOT LESS THAN TWENTY-FIVE PERCENT OF  THE  OWNER-
 SHIP INTERESTS OF THE ENTITY.
   (b)  "Reporting company" shall [have the same meaning as defined in 31
 U.S.C. § 5336(a)(11), as amended, and any regulations promulgated there-
 under, but shall only include  limited  liability  companies  formed  or
 authorized to do business in New York state]:
   (1)  MEAN  A  CORPORATION, LIMITED LIABILITY COMPANY, OR OTHER SIMILAR
 ENTITY THAT IS:
   (I) CREATED BY THE FILING OF A DOCUMENT WITH THE SECRETARY  OF  STATE;
 OR
   (II) AUTHORIZED TO DO BUSINESS IN THIS STATE PURSUANT TO ARTICLE EIGHT
 OF THIS CHAPTER; AND
   (2) NOT MEAN OR INCLUDE:
   (I) AN ISSUER:
   (A)  OF  A  CLASS OF SECURITIES REGISTERED UNDER SECTION TWELVE OF THE
 FEDERAL SECURITIES EXCHANGE ACT OF 1934 (15 U.S.C. 78L); OR
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD13229-02-5
 A. 8662                             2
 
   (B) THAT IS REQUIRED TO FILE SUPPLEMENTARY  AND  PERIODIC  INFORMATION
 UNDER  SECTION  15(D) OF THE FEDERAL SECURITIES EXCHANGE ACT OF 1934 (15
 U.S.C.  78O(D));
   (II)  AN  ENTITY  THAT EXERCISES GOVERNMENTAL AUTHORITY ON BEHALF OF A
 MUNICIPALITY, AGENCY, AUTHORITY, POLITICAL SUBDIVISION OF THE STATE;
   (III) A BANKING ORGANIZATION, AS DEFINED IN:
   (A) SECTION 3 OF THE FEDERAL DEPOSIT INSURANCE ACT (12 U.S.C. 1813);
   (B) SECTION 2(A) OF THE FEDERAL INVESTMENT COMPANY  ACT  OF  1940  (15
 U.S.C.  80A-2(A));
   (C)  SECTION 202(A) OF THE FEDERAL INVESTMENT ADVISERS ACT OF 1940 (15
 U.S.C. 80B-2(A));
   (D) A FEDERAL CREDIT UNION OR A STATE CREDIT UNION, AS SUCH TERMS  ARE
 DEFINED BY SECTION 101 OF THE FEDERAL CREDIT UNION ACT (12 U.S.C. 1752);
   (E)  A  BANK  HOLDING COMPANY AS DEFINED BY SECTION TWO OF THE FEDERAL
 BANK HOLDING COMPANY ACT OF 1956 (12 U.S.C. 1841),  AND  AS  DEFINED  BY
 SECTION  ONE  HUNDRED  FORTY-ONE  OF THE BANKING LAW; A SAVINGS AND LOAN
 HOLDING COMPANY AS DEFINED IN SECTION 10(A) OF THE FEDERAL HOME  OWNERS'
 LOAN ACT (12 U.S.C. 1467A(A));
   (F)  A  MONEY TRANSMITTING BUSINESS REGISTERED WITH THE FEDERAL SECRE-
 TARY OF THE TREASURY UNDER 31 U.S.C. § 5330; OR A LICENSEE AS DEFINED BY
 SECTION SIX HUNDRED FORTY OF THE BANKING LAW; OR
   (G) A BROKER OR DEALER, AS SUCH TERMS ARE DEFINED BY SECTION THREE  OF
 THE  FEDERAL  SECURITIES  EXCHANGE  ACT OF 1934 (15 U.S.C. 78C), THAT IS
 REGISTERED UNDER SECTION FIFTEEN OF SUCH ACT (15  U.S.C.  78  O);  OR  A
 BROKER OR DEALER AS DEFINED BY SECTION THREE HUNDRED FIFTY-NINE-E OF THE
 GENERAL BUSINESS LAW;
   (IV)  AN  EXCHANGE  OR  CLEARING  AGENCY, AS SUCH TERMS ARE DEFINED BY
 SECTION THREE OF THE FEDERAL SECURITIES EXCHANGE ACT OF 1934 (15  U.S.C.
 78C), THAT IS REGISTERED UNDER SECTION SIX OR 17A OF SUCH ACT (15 U.S.C.
 78F, 78Q-1);
   (V)  ANY  OTHER  ENTITY  NOT DESCRIBED IN SUBPARAGRAPHS (I), (VII), OR
 (VIII) OF THIS PARAGRAPH THAT IS REGISTERED WITH THE FEDERAL  SECURITIES
 AND  EXCHANGE  COMMISSION  UNDER  THE FEDERAL SECURITIES EXCHANGE ACT OF
 1934 (15 U.S.C. 78A ET SEQ.);
   (VI) AN ENTITY THAT:
   (A) IS AN INVESTMENT COMPANY, AS  DEFINED  BY  SECTION  THREE  OF  THE
 FEDERAL  INVESTMENT  COMPANY ACT OF 1940 (15 U.S.C. 80A-3) OR AN INVEST-
 MENT ADVISER, AS DEFINED BY SECTION  TWO  HUNDRED  TWO  OF  THE  FEDERAL
 INVESTMENT ADVISERS ACT OF 1940 (15 U.S.C. 80B-2); AND
   (B)  IS REGISTERED WITH THE FEDERAL SECURITIES AND EXCHANGE COMMISSION
 UNDER THE FEDERAL INVESTMENT COMPANY ACT OF 1940  (15  U.S.C.  80A-1  ET
 SEQ.) OR THE FEDERAL INVESTMENT ADVISERS ACT OF 1940 (15 U.S.C. 80B-1 ET
 SEQ.);
   (VII) AN INVESTMENT ADVISER:
   (A)  1. DESCRIBED IN SECTION 203(L) OF THE FEDERAL INVESTMENT ADVISERS
 ACT OF 1940 (15 U.S.C. 80B-3(L)); AND
   2. THAT HAS FILED ITEM 10, SCHEDULE A, AND SCHEDULE B OF  PART  1A  OF
 FORM  ADV,  OR  ANY  SUCCESSOR  THERETO, WITH THE FEDERAL SECURITIES AND
 EXCHANGE COMMISSION; OR
   (B) AS DEFINED IN ARTICLE TWENTY-THREE-A OF THE GENERAL BUSINESS LAW.
   (VIII) AN INSURANCE COMPANY, AS DEFINED IN SECTION TWO OF THE  FEDERAL
 INVESTMENT COMPANY ACT OF 1940 (15 U.S.C. 80A-2);
   (IX) AN ENTITY THAT:
   (A)  IS  AN  INSURER  THAT  IS  AUTHORIZED BY THE STATE AND SUBJECT TO
 SUPERVISION BY THE COMMISSIONER OF FINANCIAL SERVICES; AND
   (B) HAS AN OPERATING PRESENCE WITHIN NEW YORK STATE;
 A. 8662                             3
 
   (X) (A) A REGISTERED ENTITY, AS DEFINED IN SECTION 1A OF  THE  FEDERAL
 COMMODITY EXCHANGE ACT (7 U.S.C. 1A); OR
   (B) AN ENTITY THAT IS:
   1. (I) A FUTURES COMMISSION MERCHANT, INTRODUCING BROKER, SWAP DEALER,
 MAJOR  SWAP  PARTICIPANT,  COMMODITY POOL OPERATOR, OR COMMODITY TRADING
 ADVISOR, AS SUCH TERMS ARE DEFINED IN SECTION 1A OF THE FEDERAL  COMMOD-
 ITY EXCHANGE ACT (7 U.S.C. 1A); OR
   (II)  A  RETAIL  FOREIGN  EXCHANGE  DEALER,  AS  DESCRIBED  IN SECTION
 2(C)(2)(B) OF THE FEDERAL COMMODITY EXCHANGE ACT (7 U.S.C.  2(C)(2)(B));
 AND
   2.  REGISTERED  WITH  THE FEDERAL COMMODITY FUTURES TRADING COMMISSION
 UNDER THE FEDERAL COMMODITY EXCHANGE ACT (7 U.S.C. 1 ET SEQ.);
   (XI) A PUBLIC ACCOUNTING FIRM REGISTERED IN  ACCORDANCE  WITH  SECTION
 102 OF THE FEDERAL SARBANES-OXLEY ACT OF 2002 (15 U.S.C. 7212);
   (XII)  A  PUBLIC  UTILITY CORPORATION THAT PROVIDES TELECOMMUNICATIONS
 SERVICES, ELECTRICAL POWER, NATURAL GAS, OR  WATER  AND  SEWER  SERVICES
 WITHIN THE STATE;
   (XIII)  A FINANCIAL MARKET UTILITY DESIGNATED BY THE FEDERAL FINANCIAL
 STABILITY OVERSIGHT COUNCIL UNDER SECTION 804 OF  THE  FEDERAL  PAYMENT,
 CLEARING, AND SETTLEMENT SUPERVISION ACT OF 2010 (12 U.S.C. 5463);
   (XIV)  ANY  POOLED INVESTMENT VEHICLE THAT IS OPERATED OR ADVISED BY A
 PERSON DESCRIBED IN CLAUSE (A), (B), (C), (D)  OR  (F)  OF  SUBPARAGRAPH
 (III) OR SUBPARAGRAPH (V) OR (VI) OF THIS PARAGRAPH;
   (XV) ANY:
   (A)  ORGANIZATION  THAT  IS DESCRIBED IN SECTION 501(C) OF THE FEDERAL
 INTERNAL REVENUE CODE OF 1986  (DETERMINED  WITHOUT  REGARD  TO  SECTION
 508(A)  OF  SUCH  CODE) AND EXEMPT FROM TAX UNDER SECTION 501(A) OF SUCH
 CODE, EXCEPT THAT IN THE CASE OF ANY SUCH  ORGANIZATION  THAT  LOSES  AN
 EXEMPTION  FROM TAX, SUCH ORGANIZATION SHALL BE CONSIDERED TO BE CONTIN-
 UED TO BE DESCRIBED IN THIS SUBCLAUSE FOR  THE  ONE  HUNDRED  EIGHTY-DAY
 PERIOD BEGINNING ON THE DATE OF THE LOSS OF SUCH TAX-EXEMPT STATUS;
   (B)  POLITICAL  ORGANIZATION,  AS  DEFINED IN SECTION 527(E)(1) OF THE
 FEDERAL INTERNAL REVENUE CODE OF 1986, THAT IS  EXEMPT  FROM  TAX  UNDER
 SECTION 527(A) OF SUCH CODE; OR
   (C) TRUST DESCRIBED IN PARAGRAPH (1) OR (2) OF SECTION 4947(A) OF SUCH
 CODE;
   (XVI)  ANY  CORPORATION,  LIMITED  LIABILITY COMPANY, OR OTHER SIMILAR
 ENTITY THAT:
   (A) OPERATES EXCLUSIVELY TO PROVIDE FINANCIAL ASSISTANCE TO,  OR  HOLD
 GOVERNANCE  RIGHTS  OVER,  ANY ENTITY DESCRIBED IN SUBPARAGRAPH (XIV) OF
 THIS PARAGRAPH;
   (B) IS A UNITED STATES RESIDENT;
   (C) IS BENEFICIALLY OWNED OR CONTROLLED EXCLUSIVELY  BY  ONE  OR  MORE
 UNITED  STATES  RESIDENTS  THAT  ARE  UNITED STATES CITIZENS OR LAWFULLY
 ADMITTED FOR PERMANENT RESIDENCE; AND
   (D) DERIVES AT LEAST A MAJORITY OF ITS FUNDING OR REVENUE FROM ONE  OR
 MORE UNITED STATES RESIDENTS THAT ARE UNITED STATES CITIZENS OR LAWFULLY
 ADMITTED FOR PERMANENT RESIDENCE;
   (XVII) ANY ENTITY THAT:
   (A)  EMPLOYS  MORE  THAN  TWENTY EMPLOYEES ON A FULL-TIME BASIS IN THE
 UNITED STATES;
   (B) FILED IN THE PREVIOUS YEAR  FEDERAL  INCOME  TAX  RETURNS  IN  THE
 UNITED  STATES  DEMONSTRATING  MORE  THAN  FIVE MILLION DOLLARS IN GROSS
 RECEIPTS OR SALES IN THE AGGREGATE, INCLUDING THE RECEIPTS OR SALES OF:
   1. OTHER ENTITIES OWNED BY THE ENTITY; AND
   2. OTHER ENTITIES THROUGH WHICH THE ENTITY OPERATES; AND
 A. 8662                             4

   (C) HAS AN OPERATING PRESENCE AT A PHYSICAL OFFICE WITHIN THE STATE;
   (XVIII)  ANY  CORPORATION, LIMITED LIABILITY COMPANY, OR OTHER SIMILAR
 ENTITY OF WHICH THE OWNERSHIP INTERESTS ARE OWNED OR CONTROLLED, DIRECT-
 LY OR INDIRECTLY, BY ONE OR MORE ENTITIES DESCRIBED IN SUBPARAGRAPH (I),
 (II), (III), (IV), (V), (VII), (VIII), (IX), (X), (XI),  (XII),  (XIII),
 (XV) OR (XVII) OF THIS SUBPARAGRAPH;
   (XIX)  ANY  CORPORATION,  LIMITED  LIABILITY COMPANY, OR OTHER SIMILAR
 ENTITY:
   (A) IN EXISTENCE FOR OVER ONE YEAR;
   (B) THAT IS NOT ENGAGED IN ACTIVE BUSINESS;
   (C) THAT IS NOT OWNED, DIRECTLY OR INDIRECTLY, BY A FOREIGN PERSON;
   (D) THAT HAS NOT, IN THE PRECEDING TWELVE-MONTH PERIOD, EXPERIENCED  A
 CHANGE  IN OWNERSHIP OR SENT OR RECEIVED FUNDS IN AN AMOUNT GREATER THAN
 ONE THOUSAND DOLLARS, INCLUDING ALL FUNDS SENT TO OR RECEIVED  FROM  ANY
 SOURCE  THROUGH  A FINANCIAL ACCOUNT OR ACCOUNTS IN WHICH THE ENTITY, OR
 AN AFFILIATE OF THE ENTITY, MAINTAINS AN INTEREST; AND
   (E) THAT DOES NOT OTHERWISE HOLD ANY KIND OR TYPE OF ASSETS, INCLUDING
 AN OWNERSHIP INTEREST IN ANY CORPORATION, LIMITED LIABILITY COMPANY,  OR
 OTHER SIMILAR ENTITY; AND
   (XX)  ANY ENTITY OR CLASS OF ENTITIES THAT THE DEPARTMENT OF STATE, BY
 REGULATION, DETERMINED SHOULD BE EXEMPT FROM THE REQUIREMENTS OF SECTION
 ELEVEN HUNDRED SEVEN OF THIS ARTICLE BECAUSE REQUIRING BENEFICIAL OWNER-
 SHIP INFORMATION FROM THE ENTITY OR CLASS OF ENTITIES:
   (A) WOULD NOT SERVE THE PUBLIC INTEREST; AND
   (B) WOULD NOT BE HIGHLY USEFUL IN NATIONAL SECURITY, INTELLIGENCE, AND
 LAW ENFORCEMENT AGENCY EFFORTS TO DETECT, PREVENT,  OR  PROSECUTE  MONEY
 LAUNDERING,  THE  FINANCING OF TERRORISM, PROLIFERATION FINANCE, SERIOUS
 TAX FRAUD, OR OTHER CRIMES.
   (c) "Exempt company" shall mean a limited liability company or foreign
 limited liability company not otherwise defined as a  reporting  company
 that  meets  [a  condition  for  exemption  enumerated  in  31  U.S.C. §
 5336(a)(11)(B)] ONE OR MORE OF THE FOLLOWING CONDITIONS:
   (1) A MINOR CHILD, WHICH SHALL MEAN AN INDIVIDUAL  UNDER  THE  AGE  OF
 EIGHTEEN;
   (2)  AN  INDIVIDUAL  ACTING  AS A NOMINEE, INTERMEDIARY, CUSTODIAN, OR
 AGENT ON BEHALF OF ANOTHER INDIVIDUAL;
   (3) AN INDIVIDUAL ACTING SOLELY  AS  AN  EMPLOYEE  OF  A  CORPORATION,
 LIMITED  LIABILITY  COMPANY,  OR  OTHER SIMILAR ENTITY AND WHOSE CONTROL
 OVER OR ECONOMIC BENEFITS FROM SUCH ENTITY IS DERIVED  SOLELY  FROM  THE
 EMPLOYMENT STATUS OF THE PERSON;
   (4)  AN  INDIVIDUAL  WHOSE  ONLY  INTEREST  IN  A CORPORATION, LIMITED
 LIABILITY COMPANY, OR OTHER SIMILAR ENTITY IS THROUGH A RIGHT OF INHERI-
 TANCE; OR
   (5) A CREDITOR OF A CORPORATION, LIMITED LIABILITY COMPANY,  OR  OTHER
 SIMILAR  ENTITY, UNLESS THE CREDITOR MEETS THE REQUIREMENTS OF PARAGRAPH
 ONE OF THIS SUBDIVISION.
   (E) THE DEPARTMENT OF STATE IS HEREBY AUTHORIZED TO  PROMULGATE  RULES
 AND  REGULATIONS  TO  FURTHER  CLARIFY  ANY DEFINITIONS OUTLINED IN THIS
 SECTION.
   § 2. This act shall take effect immediately; provided,  however,  that
 if  the  provisions  of  chapter  772 of the laws of 2023 shall not have
 taken effect on or before such date then section one of this  act  shall
 take  effect  on the same date and in the same manner as such chapter of
 the laws of 2023 takes effect.