ALBANY- Governor Kathy Hochul has signed into law a new rule that requires Limited Liability Companies (LLC) to disclose their owners. Before signing the bill, Hochul made significant changes to the original proposal that some lawmakers say weakened the change to the point of ineffectiveness.
LLCs are independent legal entities and are permitted to own property, serve as employers, and bid on and engage in public and private contracts for the sale of goods and services. The bill, dubbed the “LLC Transparency Act” sought to create a public database of all New York LLCs and their owners. The change proposed by the governor authorizes the creation of the database but makes the information available only to state and local governments and stops short of creating a public database.
Many in the business community opposed the legislation and petitioned the governor to veto the measure altogether. Earlier this year, Attorney General Letitia James and Comptroller Thomas DiNapoli formally endorsed the bill.
One supporter of the bill, Assemblywoman Sarahana Shrestha (D, Esopus), a member of the Democratic Socialists of America (DSA), said that the new law is a step in the right direction, but that full transparency is needed.
“These negotiations tend to start with substantial watering down of bills, and the lead sponsor, Emily Gallagher, had to work hard to preserve the core integrity of the bill,” said Shrestha. “She is one of the five DSA legislators in the Assembly along with me, and I will be joining her push for full transparency next.”
Shrestha also suggested that lobbyists and special interests influenced Governor Hochul’s decision to weaken the proposed LLC law. She pointed to a news report that said one company with over $200 million in food service contracts with various state agencies was lobbying quietly against the new law behind the scenes.
“Once again, a big lobbyist has successfully overwritten the legislature’s democratic will,” said Shrestha. “And this is exactly why I’m committed to continue working in the next several years to clean up campaign finance and lobbying laws, make our government accountable and transparent, and use the legislature’s position to ensure checks and balances against misuse of power.”
The governor’s amendment also delayed the implementation of the bill, with the launch of the database coming in 2026.
