A01209 Summary:

BILL NOA01209
 
SAME ASSAME AS S03550
 
SPONSORBrennan
 
COSPNSR
 
MLTSPNSR
 
Amd SS102, 203, 204, 211 & 701, Lim Lil L
 
Relates to establishing the L3C act regarding low-profit limited liability companies.
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A01209 Actions:

BILL NOA01209
 
01/08/2015referred to corporations, authorities and commissions
01/06/2016referred to corporations, authorities and commissions
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A01209 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          1209
 
                               2015-2016 Regular Sessions
 
                   IN ASSEMBLY
 
                                     January 8, 2015
                                       ___________
 
        Introduced  by M. of A. BRENNAN -- read once and referred to the Commit-
          tee on Corporations, Authorities and Commissions
 
        AN ACT to amend the limited liability company law, in relation to estab-
          lishing the L3C act regarding low-profit limited liability companies
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. This act may be known and shall be cited as the "L3C act".
     2    §  2.  Section  102 of the limited liability company law is amended by
     3  adding a new subdivision (n-1) to read as follows:
     4    (n-1) "Low-profit limited liability company" means a limited liability
     5  company that has set forth in its articles of  organization  a  business
     6  purpose  that  satisfies,  and that is at all times operated to satisfy,
     7  each of the following requirements:
     8    (i) the limited liability company significantly  furthers  the  accom-
     9  plishment  of  one or more charitable or educational purposes within the
    10  meaning of section 170(c)(2)(B) of the internal revenue code of 1986 (26
    11  U.S.C. § 170(c)(2)(B)), and would not  have  been  formed  but  for  its
    12  relationship   to   the  accomplishment  of  charitable  or  educational
    13  purposes;
    14    (ii) no significant purpose of the limited liability  company  is  the
    15  production of income or the appreciation of property; provided, however,
    16  that  the  fact  that the limited liability company produces significant
    17  income or capital appreciation  shall  not,  in  the  absence  of  other
    18  factors,  be  conclusive evidence of a significant purpose involving the
    19  production of income or the appreciation of property; and
    20    (iii) no purpose of the limited liability company is to accomplish one
    21  or more political or legislative purposes within the meaning of  section
    22  170(c)(2)(D)  of  the  internal  revenue  code  of  1986  (26  U.S.C.  §
    23  170(c)(2)(D)).
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02445-01-5

        A. 1209                             2
 
     1    § 3. Paragraph 7 of subdivision (e) of  section  203  of  the  limited
     2  liability company law is renumbered paragraph 8 and a new paragraph 7 is
     3  added to read as follows:
     4    (7)  if  the  company  is  a  low-profit limited liability company, as
     5  defined in subdivision (n-1) of section one hundred two of this chapter,
     6  that the company is a limited liability company.
     7    § 4. Subdivisions (g), (h) and (i)  of  section  204  of  the  limited
     8  liability  company  law,  subdivision (i) as added by chapter 316 of the
     9  laws of 2005, are amended and three new subdivisions (j),  (k)  and  (l)
    10  are added to read as follows:
    11    (g)  shall  not, unless the approval of the state department of social
    12  services or its successors in function is attached to  the  articles  of
    13  organization  or  application for authority, contain the word "blind" or
    14  "handicapped." Such approval shall be granted by the state department of
    15  social services or its successors in function if in its opinion the word
    16  "blind" or "handicapped" as used  in  the  limited  liability  company's
    17  proposed  name  will  not  tend  to  mislead  or confuse the public into
    18  believing that the limited liability company is organized for charitable
    19  or nonprofit purposes related to the blind or the handicapped; [and]
    20    (h) shall not, unless the approval of the attorney general is attached
    21  to the articles of organization or application  for  authority,  contain
    22  the  word  "exchange"  or  any  abbreviation or derivative thereof. Such
    23  approval shall not be granted by the attorney general if in his  or  her
    24  opinion  the  use of the word "exchange" in the limited liability compa-
    25  ny's proposed name would falsely imply that the limited liability compa-
    26  ny conducts its business at a place where trade is carried on in securi-
    27  ties or commodities by brokers, dealers or merchants[.];
    28    (i) shall not contain  the  following  terms:  "school,"  "education,"
    29  "elementary,"     "secondary,"     "kindergarten,"    "prekindergarten,"
    30  "preschool,"  "nursery  school,"  "museum,"   "history,"   "historical,"
    31  "historical society," "arboretum," "library," "college," "university" or
    32  other  term  restricted by section two hundred twenty-four of the educa-
    33  tion law; "conservatory," "academy," or "institute" or any  abbreviation
    34  or  derivative  of  such  terms,  shall have endorsed thereon or annexed
    35  thereto the consent of the commissioner of education[.];
    36    (j) shall, in the case of  a  low-profit  limited  liability  company,
    37  contain the words "low-profit limited liability company" or the abbrevi-
    38  ations "L3C" or "l3c", with or without periods or other punctuation;
    39    (k)  shall  not, in the case of a low-profit limited liability company
    40  unless the approval of the state department of social  services  or  its
    41  successors  in  function  is attached to the articles of organization or
    42  application for authority, contain the word  "blind"  or  "handicapped."
    43  Such  approval  shall  be  granted  by  the  state  department of social
    44  services or its successors in  function  if  in  its  opinion  the  word
    45  "blind"  or  "handicapped"  as  used  in the limited liability company's
    46  proposed name will not tend  to  mislead  or  confuse  the  public  into
    47  believing that the limited liability company is organized for charitable
    48  or nonprofit purposes related to the blind or the handicapped; and
    49    (l)  shall  not, in the case of a low-profit limited liability company
    50  unless the approval of the attorney general is attached to the  articles
    51  of   organization   or  application  for  authority,  contain  the  word
    52  "exchange" or any abbreviation  or  derivative  thereof.  Such  approval
    53  shall  not  be  granted by the attorney general if in his or her opinion
    54  the use of the  word  "exchange"  in  the  limited  liability  company's
    55  proposed  name  would  falsely  imply that the limited liability company

        A. 1209                             3
 
     1  conducts its business at a place where trade is carried on in securities
     2  or commodities by brokers, dealers or merchants.
     3    §  5.  Paragraphs  8  and  9  of subdivision (d) of section 211 of the
     4  limited liability company law are renumbered paragraphs 9 and 10  and  a
     5  new paragraph 8 is added to read as follows:
     6    (8) if the limited liability company is a low-profit limited liability
     7  company, its failure to meet any of the requirements set out in subdivi-
     8  sion (n-1) of section one hundred two of this chapter.
     9    §  6.  Paragraph  5  of  subdivision (a) of section 701 of the limited
    10  liability company law is renumbered paragraph 6 and a new paragraph 5 is
    11  added to read as follows:
    12    (5) if the limited liability company is a low-profit limited liability
    13  company that has ceased to meet any  of  the  requirements  set  out  in
    14  subdivision  (n-1)  of  section  one hundred two of this chapter and has
    15  failed for ninety days after ceasing to meet those requirements to  file
    16  articles  of amendment with the department of state amending its name to
    17  conform with the requirements of section two hundred four of this  chap-
    18  ter governing limited liability company names.
    19    § 7.  This act shall take effect immediately.
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