S T A T E O F N E W Y O R K
________________________________________________________________________
8432
2025-2026 Regular Sessions
I N S E N A T E
June 10, 2025
___________
Introduced by Sen. HOYLMAN-SIGAL -- read twice and ordered printed, and
when printed to be committed to the Committee on Rules
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 LIMITED LIABILITY COMPANY 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.
LBD13229-04-5
S. 8432 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;
S. 8432 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 LIMITED LIABILITY COMPANY 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
(C) HAS AN OPERATING PRESENCE AT A PHYSICAL OFFICE WITHIN THE STATE;
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(XVIII) ANY LIMITED LIABILITY COMPANY OF WHICH THE OWNERSHIP INTERESTS
ARE OWNED OR CONTROLLED, DIRECTLY 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 LIMITED LIABILITY COMPANY:
(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 LIMITED LIABILITY COMPANY; 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 LIMITED LIABILITY
COMPANY, 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 LIMITED LIABILITY COMPANY,
IS THROUGH A RIGHT OF INHERITANCE; OR
(5) A CREDITOR OF A LIMITED LIABILITY COMPANY 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.
