This bill would have amended the state’s Limited Liability Company (LLC) law to clarify and expand how “beneficial ownership” reporting works under the New York LLC Transparency Act.

Key features of vetoed bill

• Redefined key terms like “beneficial owner,” “reporting company,” and “exempt company” in state law so they weren’t dependent on changing federal standards.

• Made New York’s reporting requirements independent of the federal Corporate Transparency Act (CTA), meaning domestic LLCs and those otherwise covered could be required to report ownership information to the New York Department of State even if federal requirements no longer applied.

What this means

Governor Hochul vetoed S. 8432 late Friday night. A new bill would have be introduced for consideration by the Legislature next session. 

The veto message indicated some inconsistency with federal law which impose a unique mandate on NY businesses. Proponents of LLC transparency will also have to find a new Senate sponsor and make revisions to the bill.

CLICK HERE FOR TEXT OF VETOED BILL

 VETO MESSAGE - No. 164

TO THE SENATE:

I am returning herewith, without my approval, the following bill:

Senate Bill Number 8432, entitled:

    "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"

    NOT APPROVED

  The  legislation  would  modify  the LLC Transparency Act, in light of

changes to the federal Corporate Transparency Act (CTA). The LLC  Trans-

parency Act was enacted to ensure that the state would receive reporting

similar  to that which is required under the federal CTA, thereby ensur-

ing  transparency  regarding  ownership  while  not  placing  additional

burdens on limited liability companies (LLCs). Since the LLC Transparen-

cy  Act was passed, the Federal Government has established new reporting

criteria, limiting requirements under the CTA. This bill would create  a

mandate  for  businesses  in New York that is not required under federal

law.

  As the LLC Transparency Act is  implemented  next  year,  we  want  to

ensure  that those required to provide updated reporting, continue to do

so, but imposing additional requirements on LLCs is not in the  interest

of New York State. Therefore, I am constrained to veto.

  The bill is disapproved.                       (signed) KATHY HOCHUL