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New York Enacts LLC Transparency Act Requiring Disclosure of Beneficial Owners

25 Feb

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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
CTANYLTA
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 businessBOI be provided at the same time as the formation or qualification to do business
Not required to certify the exemptionThe exemption must be certified
Requires reporting of company’s applicantsDoes not require reporting of company’s applicants
CTA requires an image of the identifying documentDoes not require an image of the identifying document
Names of beneficial owners of entities are not available to the publicNames of beneficial owners of LLCs are available to the public
Imposes criminal penalties for violations of the reporting ruleDoes 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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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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