As New York Gov. Kathy Hochul is expected to sign the LLC Transparency Act into law, some construction LLC owners may wonder what this means for the future of their businesses. While the Act is sweeping and potentially affects many industries, it was brought, in part, to address wage thefts in the construction industry.
The Act addresses the practices of some LLCs that are seen as predatory, e.g., the notorious former Parkside Construction LLC. At its lofty location in Steinway Tower on W. 57th St., Parkside ripped off $1.7 million of wages for NY construction workers and dodged payment of almost “$8 million in workers’ compensation premiums.” Following an indictment, the courts accepted a plea of guilty to the allegations.
Goals of the Act
Co-sponsored by Manhattan Sen. Brad Hoylman-Sigal (D) and Brooklyn Assemblywoman Emily Gallagher (D), the LLC Transparency Act is designed to end the lack of transparency surrounding some unscrupulous LLCs that use their secretive statuses to deny payments to construction laborers and tradesmen. Other industries targeted by the bill include the real estate market and anyone involved in money laundering to hide proceeds from ill-gotten gains.
Here’s the good news
As long as your LLC has not engaged in untoward business dealings or practices, you should have nothing to worry about. However, we live in a litigious society where many frivolous lawsuits are filed every day. If you have any inkling there might be a legal problem on your horizon, it is always better to get ahead of the situation so that you can begin assembling a stalwart defense to any civil or criminal allegations you might face.