“Governor Signs Bill to Change Publication Requirements for LLCs, LPs and LLPs”
New York Governor George Pataki has signed into law a bill (the “New Publication Law”), which will make important (and burdensome) changes to the publication requirements for limited liability companies (“LLCs”), limited partnerships (“LPs”) and limited liability partnerships (“LLPs”) (collectively, the “Covered Entities”) formed in New York and similar entities formed outside of New York that qualify to do business in New York.
Among other consequences, the New Publication Law will make the following three significant changes to the publication requirement for Covered Entities:
1. change the duration and frequency of the publication requirement;
2. require public disclosure of the names of up to 10 persons with the largest ownership interests in the entity; and
3. increase the consequences for non-publication, including denying the organization the ability to legally transact business in New York.
This Stroock Special Bulletin examines these changes and others that will take effect on June 1, 2006 (the effective date of the New Publication Law).
The New Publication Law has been of particular interest to hedge fund and private fund managers who generally operate under the LLC or LP format and do not wish to disclose the identities of investors. This legislation also is of particular interest to real estate investors who generally hold each real estate investment through a separate LLC or LP and do not wish to disclose the identities of investors and for whom compliance with the publication law can be a financial burden.
[Editor’s Note: this publication was followed in June 2006 by a similar Stroock Special Bulletin, which discussed further amendments].