Shell Companies Are Often Unreachable When Problems Arise
Senator Sam Thompson’s legislation that would lift the veil of anonymity from limited liability companies that own residential property was approved today by the Senate Community and Urban Affairs Committee.
Sen. Sam Thompson’s legislation that would lift the veil of anonymity from limited liability companies that own residential property was approved by the Senate Community and Urban Affairs Committee. (©iStock)
Thompson’s measure, S-672, would require LLCs to disclose the names and business addresses of all members, managers and authorized agents of the company when recording deeds for homes with as many as four dwelling units.
“Shell corporations existing only on paper are buying homes in some neighborhoods,” said Thompson (R-12). “When there are problems, people can’t find anybody to talk to get issues resolved.
“It’s frustrating when neighbors don’t know who to turn to for help. Making the names of responsible parties available eliminates the obstacle,” Thompson added.
The legislation would also help municipalities that often struggle to enforce local codes with shell corporations.
Any LLC recording a deed would be required under the bill to provide an affidavit identifying all responsible individuals. If a business entity is part of the LLC, the bill calls for disclosure of the people with ultimate ownership of the business.
An identical bill (S-241) was approved by the Senate in the previous legislative session, passing with a vote of 36-0-4 on Jan. 9, 2020.
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