6 ms·

The LLC transparency stuff drives me nuts. If a company wants LLC guarantees, it should publish who their owners are. It is incredibly frustrating to literally

The LLC transparency stuff drives me nuts. If a company wants LLC guarantees, it should publish who their owners are. It is incredibly frustrating to literally have no idea who is being XYZ LLC. Especially when you have “special purpose vehicle” LLC’s which aren’t really even real companies at all.

Terr_ 3y ago
> a company wants LLC guarantees To wit, getting the government to declare it especially exempt from the normal responsibilities of debts and liabilities that affect everyone else.
- couchand 3y ago
  > exempt from the normal responsibilities of debts and liabilities I'm sorry, what are you talking about?
  - Terr_ 3y ago
    https://www.investopedia.com/terms/l/limitedliability.asp https://www.investopedia.com/terms/l/limitedliability.asp They are ubiquitous today, but at one time each limited liability corporation was individually created by a unique law passed by the legislature, for a specific purpose--often infrastructure projects--and with a fixed lifetime unless renewed again by another law.
    - couchand 3y ago
      Please show me where in that citation is any reference to an LLC being "exempt from the normal responsibilities of debts and liabilities". As the discussion there indicates, limited liability is a totally normal thing, and despite the name it applies to other corporate structures, notably C and S corporations. So what exactly is the "normal" that you claim LLCs deviate from?
      - Scubabear68 3y ago
        The article referenced conflates public companies and private ones. Public companies do have liability restrictions, but notably (in the U.S.) ownership is explicitly reported. LLC’s are private companies, but in many states their ownership can be masked or wholly secret. In my experience masking ownership or allowing secret ownership of LLC’s is a net loss for society as a whole. There is a large surface area where ownership is not being masked for a good reason, but is being done as deliberate deception.
      - IX-103 3y ago
        It's normal now, and as you mention "limited liability" now applies to all corporations. As grandparent poster mentioned, however, this sort of capability originally required a special dispensation from the crown (or an act of Congress). Some examples are the "East India Tea Company", which was effectively one of the colonial arms of the British government. At some point we decided that this sort of thing should be available for everyone with the money and time to file the appropriate paperwork. It's really odd though since you can avoid things through incorporation that you can't avoid through other means -- debts that would carry through bankruptcy, and even many criminal issues (at least if they don't rise to the level to pierce the corporate veil).
deleted 3y ago
[deleted]
gavinhoward 3y ago
I am the owner of an LLC. And I agree with you. There is a similar law going into effect at the Federal level in January. Some people tried to fearmonger when telling me about it, but I thought it was pretty sane after some research. Having an LLC is a privilege, not a right, and we should act like it.
- tazu 3y ago
  > Having an LLC is a privilege, not a right, and we should act like it. I am also an owner of an LLC, and think it should be a right.
  - Dylan16807 3y ago
    Why should limiting your liability be a right?
  - gavinhoward 3y ago
    And you gave no reason why you think that. If you wanted to be free of government requirements, you should have used a sole proprietorship. Otherwise, since the government is giving you some protection, they can ask for things in return.
- brigadier132 3y ago
  Privacy is a right. Why do I need random people scrutinizing everything I do?
  - gavinhoward 3y ago
    When random people are giving you protection from legal catastrophe, I think they have a right to transparency.
    - brigadier132 3y ago
      > When random people are giving you protection from legal catastrophe That's what the justice system is for, not the mob.
somenameforme 3y ago
In what scenario is this incredibly frustrating? I can't recall in my life ever once particularly caring who happened to own an LLC, and I think this is true of most people? I find LLC anonymity pretty useful for one important reason - there's lots of crazy people out there - probably at least loosely related to why you're Scubabear68 instead of JasonWilliamsFresno68. I also think it fits the legal and practical definition of an LLC relatively well where you're dealing with that 'entity' even if, of course, all any business is, is just a group of people.
- tetromino_ 3y ago
  It's frustrating if you are trying to rent a place. Prospective tenants should have the ability to easily look up that 123 Main Street LLC is partially owned by a slumlord whose other rental LLCs have accumulated hundreds of complaints.
  - paiute 3y ago
    Add builders and contractors to that
  - somenameforme 3y ago
    This example doesn't feel contrived to you? The odds of somebody setting up a bunch of LLCs for each property, maintaining completely anonymity, and somehow these places all avoiding a million complaints visible with e.g. a simple web search just seems, to me, to be difficult to imagine.
- 4death4 3y ago
  It's important if you're hiring someone to do something important and you want to verify the owners haven't been named in any other lawsuits, don't have a conflict of interest, etc.
  - somenameforme 3y ago
    In such case, why not simply ask who the owner(s) are, and/or include such conditions in the contractual negotiations? If the company is not new, there will generally be sufficient information available out there about them. If they are new, then you have every reason (and the leverage) to be particular inquisitive during your due diligence.
brtkdotse 3y ago
The secrecy around privately held companies seems so… childish and petty.
yieldcrv 3y ago
Disagree button Hoping to get the federal one invalidated as soon as 2024 starts, easier to establish standing in the courts once that law starts. State level ones may be able to pass muster and be evaluated independently, but NY was already unattractive place to form LLC’s and not seeing the difference here. The states compete with each other for business so it just makes other states more attractive. Maybe certain industries need beneficial owner information. But all LLC’s by mere nature of existing? No

Terr_ 3y ago

> a company wants LLC guarantees To wit, getting the government to declare it especially exempt from the normal responsibilities of debts and liabilities that affect everyone else.

couchand 3y ago
> exempt from the normal responsibilities of debts and liabilities I'm sorry, what are you talking about?
- Terr_ 3y ago
  https://www.investopedia.com/terms/l/limitedliability.asp https://www.investopedia.com/terms/l/limitedliability.asp They are ubiquitous today, but at one time each limited liability corporation was individually created by a unique law passed by the legislature, for a specific purpose--often infrastructure projects--and with a fixed lifetime unless renewed again by another law.
  - couchand 3y ago
    Please show me where in that citation is any reference to an LLC being "exempt from the normal responsibilities of debts and liabilities". As the discussion there indicates, limited liability is a totally normal thing, and despite the name it applies to other corporate structures, notably C and S corporations. So what exactly is the "normal" that you claim LLCs deviate from?
    - Scubabear68 3y ago
      The article referenced conflates public companies and private ones. Public companies do have liability restrictions, but notably (in the U.S.) ownership is explicitly reported. LLC’s are private companies, but in many states their ownership can be masked or wholly secret. In my experience masking ownership or allowing secret ownership of LLC’s is a net loss for society as a whole. There is a large surface area where ownership is not being masked for a good reason, but is being done as deliberate deception.
    - IX-103 3y ago
      It's normal now, and as you mention "limited liability" now applies to all corporations. As grandparent poster mentioned, however, this sort of capability originally required a special dispensation from the crown (or an act of Congress). Some examples are the "East India Tea Company", which was effectively one of the colonial arms of the British government. At some point we decided that this sort of thing should be available for everyone with the money and time to file the appropriate paperwork. It's really odd though since you can avoid things through incorporation that you can't avoid through other means -- debts that would carry through bankruptcy, and even many criminal issues (at least if they don't rise to the level to pierce the corporate veil).

deleted 3y ago

[deleted]

gavinhoward 3y ago

I am the owner of an LLC. And I agree with you. There is a similar law going into effect at the Federal level in January. Some people tried to fearmonger when telling me about it, but I thought it was pretty sane after some research. Having an LLC is a privilege, not a right, and we should act like it.

tazu 3y ago
> Having an LLC is a privilege, not a right, and we should act like it. I am also an owner of an LLC, and think it should be a right.
- Dylan16807 3y ago
  Why should limiting your liability be a right?
- gavinhoward 3y ago
  And you gave no reason why you think that. If you wanted to be free of government requirements, you should have used a sole proprietorship. Otherwise, since the government is giving you some protection, they can ask for things in return.
brigadier132 3y ago
Privacy is a right. Why do I need random people scrutinizing everything I do?
- gavinhoward 3y ago
  When random people are giving you protection from legal catastrophe, I think they have a right to transparency.
  - brigadier132 3y ago
    > When random people are giving you protection from legal catastrophe That's what the justice system is for, not the mob.

somenameforme 3y ago

In what scenario is this incredibly frustrating? I can't recall in my life ever once particularly caring who happened to own an LLC, and I think this is true of most people? I find LLC anonymity pretty useful for one important reason - there's lots of crazy people out there - probably at least loosely related to why you're Scubabear68 instead of JasonWilliamsFresno68. I also think it fits the legal and practical definition of an LLC relatively well where you're dealing with that 'entity' even if, of course, all any business is, is just a group of people.

tetromino_ 3y ago
It's frustrating if you are trying to rent a place. Prospective tenants should have the ability to easily look up that 123 Main Street LLC is partially owned by a slumlord whose other rental LLCs have accumulated hundreds of complaints.
- paiute 3y ago
  Add builders and contractors to that
- somenameforme 3y ago
  This example doesn't feel contrived to you? The odds of somebody setting up a bunch of LLCs for each property, maintaining completely anonymity, and somehow these places all avoiding a million complaints visible with e.g. a simple web search just seems, to me, to be difficult to imagine.
4death4 3y ago
It's important if you're hiring someone to do something important and you want to verify the owners haven't been named in any other lawsuits, don't have a conflict of interest, etc.
- somenameforme 3y ago
  In such case, why not simply ask who the owner(s) are, and/or include such conditions in the contractual negotiations? If the company is not new, there will generally be sufficient information available out there about them. If they are new, then you have every reason (and the leverage) to be particular inquisitive during your due diligence.

brtkdotse 3y ago

The secrecy around privately held companies seems so… childish and petty.

yieldcrv 3y ago

Disagree button Hoping to get the federal one invalidated as soon as 2024 starts, easier to establish standing in the courts once that law starts. State level ones may be able to pass muster and be evaluated independently, but NY was already unattractive place to form LLC’s and not seeing the difference here. The states compete with each other for business so it just makes other states more attractive. Maybe certain industries need beneficial owner information. But all LLC’s by mere nature of existing? No