New York State enacted a new law, effective September 13, 2019, which provides that when an LLC is the grantor or grantee in a deed transfer of a building containing one to four family dwelling units, the LLC is required to provide the Department of Taxation and Finance with the names and addresses of all members, managers and other authorized persons of the LLC. If any member of the LLC is itself an LLC or other business entity, then the entity must provide the Department with a list of all shareholders, directors, officers, members, managers and/or partners of that LLC or business entity until “ultimate ownership by a natural person is disclosed.”
In November 2019, after public criticism, the Governor’s Office and the Department of Taxation issued updated guidance that the law applies to the sale of residential “buildings” (whereas, initially the new law applied to “real property”). Therefore, because the term “buildings” excludes condominium units, which are typically treated as subdivisions of a residential building rather than an entire building, the new will not apply to the sale of condominium units.
We are also monitoring legislation introduced in 2019 in both the U.S. House of Representatives and the Senate which would require disclosure of beneficial ownership of LLCs and shell corporations.