New York Adopts Disclosure Requirements for Limited Liability Companies

 

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Chapter 297 of the Laws of 2019, enacted September 13, 2019 to “take effect immediately”, amends Tax Law Section 1409(a) and adds a new subdivision (h) to Section 11-205 of New York City’s Administrative Code, requiring that transfer tax returns for the sale of residential real property sold or purchased by a limited liability company include information on the ownership of the LLC. The changes made to the Sections by Chapter 297 are set forth below. 

Tax Law Section 1409(a) - … When the grantor or grantee of a deed for residential real property containing one-to four-family dwelling units is a limited liability company, the joint return shall not be accepted for filing unless it is accompanied by a document which identifies the names and business addresses of all members, managers, and any other authorized persons, if any, of such limited liability company and the names and business addresses or, if none, the business addresses of all shareholders, directors, officers, members, managers and partners of any limited liability company or other business entity that are to be the members, managers or authorized persons, if any, of such limited liability company. The identification of such names and addresses shall not be deemed an unwarranted invasion of personal privacy pursuant to article six of the public officers law. If any such member, manager or authorized person of the limited liability company is itself a limited liability company or other business entity, the names and addresses of the shareholders, directors, officers, members, managers and partners of the limited liability company or other business entity shall also be disclosed until full disclosure of ultimate ownership by natural persons is achieved. For purposes of this subdivision, the terms "members", "managers", "authorized person", limited liability company" and "other business entity" shall have the same meaning as those terms are defined in section one hundred two of the limited liability company law…

NYC Administrative Code Section 11-2105(h)- When the grantor or grantee of a deed for residential real property containing one-to four-family dwelling units is a limited liability company, the joint return shall not be accepted for filing unless it is accompanied by a document which identifies the names and business addresses of all members, managers, and any other authorized persons, if any, of such limited liability company and the names and business addresses or, if none, the business addresses of all shareholders, directors, officers, members, managers and partners of any limited liability company or other business entity that are to be the members, managers or authorized persons, if any, of such limited liability company. The identification of such names and addresses shall not be deemed an unwarranted invasion of personal privacy pursuant to article six of the public officers law. If any such member, manager or authorized person of the limited liability company is itself a limited liability company or other business entity, the names and addresses of the shareholders, directors, officers, members, managers and partners of the limited liability company or other business entity shall also be disclosed until full disclosure of ultimate ownership by natural persons is achieved. For purposes of this subdivision, the terms "members", “managers", "authorized person", "limited liability company" and "other business entity" shall have the same meaning as those terms are defined in section one hundred two of the limited liability company law.

New York State’s Department of Taxation and Finance has issued an “Important Notice regarding conveyances to and from a limited liability company” which provides the following information:

“When a seller (grantor) or buyer (grantee) is an LLC and the property being conveyed is a one- to four-family residence or a residential condominium, Form TP-584 or Form TP-584-NYC cannot be accepted for filing unless accompanied by documentation that identifies the names and business 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, the names and business addresses of the shareholders, directors, officers, members, managers and/or partners of that LLC or other business entity must also be provided until ultimate ownership by natural persons is disclosed.

The documentation should include the following information for each individual or entity: name; business address; and taxpayer identification number.

In addition, documentation should demonstrate that 100% of the ownership of each entity has been reported.

The term authorized person means a person, whether or not a member, who is authorized by the operating agreement, or otherwise, to act on behalf of an LLC or foreign LLC…”

The Notice is posted at https://www.tax.ny.gov/bus/transfer/rptidx.htm#conveyances

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