WEST PALM BEACH, FL (HEDGECO.NET) – Managed Funds Association (MFA) announced today that it is notifying its members that Governor George Pataki signed new legislation on May 31st to amend thepublication requirements applicable to limited partnerships (LPs), limited liability partnerships (LLPs), limited liability companies (LLCs), and similar limited liability entities operating in NewYork State. MFA is pleased that the final legislation is less burdensome to its members than originally proposed.
Effective June 1, 2006, the new law requires every limited liability entity newly organized or newly doing business in New York, within 120-days of the effectiveness of the articles of organization,to publish certain information such as its name, address and business purpose, at least once a week for six successive weeks in two newspapers designated by the country clerk where its principaloffice is located, among other requirements. Under the new law, if the publication is not made as required, the entity’s authority to “carry on, conduct or transact any business†in New Yorkwill be “suspended†until it complies.
MFA has been actively engaged in this legislative process since 2004. The original version of the legislation contained an onerous provision that would have required the publication notice toinclude the entity’s top 10 interest-holders. MFA successfully lobbied in 2004 for a carve out from this provision for certain private alternative investment vehicles represented in itsmembership base (certain investment advisers, hedge funds, commodity pool operators and commodity trading advisors). MFA is pleased that the final legislation does not require this provisionfor any LP, LLP, LLC or similar entity formed or doing business in New York.
MFA was concerned about a chapter amendment introduced earlier this year. That amendment would have stripped the entity’s limited liability status for failure to comply with this provision and wouldhave made all members or limited partners of the entity subject to personal liability for the entity’s debts and obligations.
“We are pleased that the authors of this legislation accepted our arguments and did not include these onerous provisions in the final legislation,†MFA president John G. Gaine said, adding, “Oursuccessful lobbying efforts before the New York State Legislature, as well as in Connecticut, illustrates the breadth of MFA’s advocacy, which extends well beyond Washington D.C. to state andinternational policymakers.â€Â
This is not the first legislative success for MFA in New York State. In 2002, MFA successfully lobbied to preserve registration exemptions for many hedge fund managers in legislation thatamended New York’s Investment Advisers Law. This legislation was signed by Governor Pataki on September 17, 2002 and preserved the exempt status available to investment advisers under federallaw.
MFA, headquartered in Washington, DC, is the primary trade association representing professionals who specialize in alternative investment strategies including hedge funds, funds of funds and managedfutures funds. MFA’s over 1,000 members are affiliated with the majority of the 50 largest hedge funds, which manage a significant portion of the over $1.2 trillion invested in hedge funds. Since itsinception in 1991, MFA has provided industry leadership in government relations, communications, media relations, and education to MFA members and investors.
