Mass. bill would require LLCs to disclose beneficial owners to state

BOSTON — Representative Erika Uyterhoeven filed House Bill No. 501 on Jan. 16, 2025, proposing mandatory disclosure of "beneficial owners" for limited liability companies organized or doing business in Massachusetts.

The bill, titled “An Act to ensure LLC transparency,” would amend chapter 156C of the Massachusetts General Laws to require LLCs and foreign LLCs to identify each beneficial owner to the Secretary of the Commonwealth and to update that information when ownership changes.

The measure defines a "beneficial owner" as a person who directly or indirectly (i) holds a membership interest in an LLC, (ii) exercises substantial control over a membership interest, or (iii) has been assigned a membership interest; it also includes any ultimate beneficial owner regardless of where the LLC is registered. The bill lists several categories of persons who would not be treated as beneficial owners, including minors, nominees or intermediaries acting on behalf of another person, and employees whose interest derives solely from employment status.

Under the bill, disclosures to the Secretary of the Commonwealth must identify each beneficial owner by name, date of birth, current residential or business address, a nonexpired government identification number (for example, a U.S. or foreign passport or a state-issued driver’s license or ID card containing a photograph and birth date), and a federal or state taxpayer identification number or a legal entity identifier. The measure would also require firms to identify and explain every intermediary linking a beneficial owner to the LLC and how intermediaries connect to one another; the secretary may permit or require a diagram to meet that requirement.

The draft exempts some indirect holdings from full disclosure where ownership is exercised through a publicly traded entity, a real estate investment trust (REIT), an UPREIT or a mutual fund unless the beneficial owner directly or indirectly holds or controls 25% or more of the equity in the LLC. The bill likewise requires identification of trustees, trust protectors, beneficiaries and grantors when a trust or similar arrangement holds or controls 25% or more of the LLC’s equity or exercises substantial control.

For foreign LLCs, the bill would require amended applications to be filed with the Secretary within 30 days of any change in the entity’s beneficial owners. It would also require that, when reporting to the state, entities provide the total number of properties each beneficial owner owns in the commonwealth and list the city or town where each property is located.

The bill allows an LLC to submit beneficial ownership information already provided to the federal government under 31 U.S.C. §5336 (the Corporate Transparency Act) to satisfy the state filing requirement, provided that federal registration is current and contains all information the bill requires.

All information filed under the proposed section would be a matter of public record and subject to chapter 66 of the Massachusetts General Laws, the bill says.

The bill was filed in the House docket as House Docket No. 2389 and House No. 501 and was referred to the Joint Committee on Economic Development and Emerging Technologies. It is a proposal pending committee consideration and not law; the measure would require legislative approval and administrative implementation to take effect.

Key procedural details from the filing include the explicit amendment points to chapter 156C (sections 2, 12, 13, 48, 52 and a new section 73) and a 30-day deadline for foreign LLCs to file amended registration when beneficial owners change. The filing date shown on the document is Jan. 16, 2025.

Representative Erika Uyterhoeven of Somerville presented the petition; no committee action or floor vote is recorded in the filing itself.