Limited liability companies and similar corporations in the United States are often formed to protect a business owner’s personal assets. In California, the world’s fifth largest economy, such businesses are already required to register with the Secretary of State and share information including the name of the business, its address and the names of its executives or representatives.
But Democratic state Sen. Maria Elana Durazo said that that’s not enough. She also wants the public to know who actually owns the company. Her bill would require these companies to list anyone who owns at least 25% of the company’s assets on its registration with the state. It would apply to all LLCs and similar corporations regardless of the size.
Durazo said the lack of that crucial information has allowed people to set up business structures where one company is owned in the name of another, all to shield their identities from the public, government officials and even law enforcement agencies. In many cases, local and state officials must spend significant time and resources to track down the owners before they can charge or sue the business for violating state laws, if they can find them at all.
“Some owners can abuse LLC to shield not only their assets but also their identities,” Durazo said at a hearing. “This is a good governance bill.”
With support from labor, housing and environmental groups, her bill passed a key legislative committee this week. There was no debate. It needs a second committee vote before reaching the Senate floor.
A similar proposal last year did not survive the Legislature’s suspense file, a mysterious process where lawmakers decide — with no explanation — whether bills should move forward or not.
This story is from the April 20, 2024 edition of Techlife News.
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This story is from the April 20, 2024 edition of Techlife News.
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