New York Enacts LLC Transparency Act Requiring Disclosure of Beneficial Owners

25 Feb

Update Applicable to:	Effective date
All Limited Liability Companies formed or doing business in New York (unless exempt)	*January 1, 2025*

What happened?

On December 22, 2023, New York’s governor, Kathy Hochul, signed the New York LLC Transparency Act (NYLTA), aimed at pursuing unlawful activity, including wage theft, money laundering, and tenant mistreatment.

What are the details?

The NYLTA will become effective once the New York Legislature passes an amending chapter.

It uses the same definition of beneficial owners, contains the same 23 exemptions, and permits the disclosure to the New York Department of State of the initial report filed under the CTA.

The NYLTA requires disclosure to the New York Department of State of beneficial ownership information (BOI) of any domestic or foreign LLC doing business in New York, requiring filing:

(i) Upon filing or amending the LLC’s articles of organization or application for authority or
(ii) For LLCs organized or qualified in New York before the effective date of the NYLTA, before January 1, 2025.
(iii) For exempt LLC, file a statement signed by a member or manager that indicates the provisions(s) of the Corporate Transparency Act (CTA) which qualifies it for the exemption.

*Differences between CTA Vs. NYLTA*
*CTA*	*NYLTA*
All entities (including but not limited to LLCs)	Only LLCs
BOI be provided 90 days or 30 days after the formation or registration to do business	BOI be provided at the same time as the formation or qualification to do business
Not required to certify the exemption	The exemption must be certified
Requires reporting of company’s applicants	Does not require reporting of company’s applicants
CTA requires an image of the identifying document	Does not require an image of the identifying document
Names of beneficial owners of entities are not available to the public	Names of beneficial owners of LLCs are available to the public
Imposes criminal penalties for violations of the reporting rule	Does not impose criminal penalties

Business Considerations

Remember that the BOI required by New York is in addition to that required by the Corporate Transparency Act; therefore, LLCs may not be exempt from filing on one or both regulations.
If applicable, review your practices to file in a timely manner both in compliance with the CTA (if applicable to your business) and the NYLTA.
Collaborate closely with your CPA and employment attorney to ensure compliance with the requirements for timely and accurate updates if changes occur in the future.

Resources:

Source References

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