New York LLC Transparency Act: What You Must Know
Find out the key insights you may know to ensure compliance with the New York state laws and regulations.
Beneficial Ownership Information Reporting (BOIR) plays a crucial role in ensuring compliance with the Financial Crimes Enforcement Network (FinCEN) regulations. By requiring companies to disclose their true owners, BOI reporting aims to prevent illicit activities such as money laundering, fraud, and tax evasion. This focus on transparency has not only gained national attention but has also led individual states to implement their regulations to further tighten compliance.
On March 1, 2024, New York’s Governor signed Senate Bill 8059, mandating that all LLCs formed under New York law or formed elsewhere and registered to do business in New York must file either a beneficial ownership disclosure or an attestation of exemption with the New York Department of State. The original New York LLC Transparency Law (NY LLCTA) was signed on December 22, 2023, and was later amended on March 1, 2024, clarifying operating rules. The earliest reporting date is set for January 1, 2026, for entities formed on or after that date, and January 1, 2027, for entities formed or qualified before January 1, 2026.
Who has to file the BOI report?
The New York LLC Transparency Law (NY LLCTA) is a pivotal framework for LLCs operating within New York. This law applies exclusively to entities formed within the state or qualified to do business in New York.
In contrast, the U.S. Corporate Transparency Act (CTA) has a broader scope, covering both domestic entities formed within the U.S. and foreign entities that are registered to conduct business in the U.S. by filing a document with a secretary of state or a similar office under state or Indian tribe laws.
Disclosure requirements
Company applicant disclosure
Under the NY LLCTA, company applicant disclosure is mandated for LLCs formed or qualified before January 1, 2026. This provision contrasts the CTA, which stipulates that company applicant disclosure is required solely for entities formed or registered after January 1, 2024.
Disclosure Flexibility
The NY LLCTA offers some flexibility. You can provide a home or business address as an applicant or beneficial owner under the NY LLCTA. This contrasts with CTA’s dictate that a residential address must be used for disclosure unless the entity is formed or registered during business, where a business address is permissible.
Valid identification document
The NY LLCTA does not require you to include a copy of a valid identification document with your disclosure filing. There is also no equivalent to the FinCEN ID within the NY LLCTA, and using a FinCEN ID is not permitted for beneficial ownership disclosure under this law. This distinction is crucial as it impacts the confidentiality of your personally identifiable information, providing a different level of privacy protection than the CTA.
Due dates for filings
Initial reports
- Under NY LLCTA, LLCs formed or qualified to do business in New York on or after January 1, 2026, must comply with the new reporting requirements within 30 days. For LLCs formed or qualified before January 1, 2026, the deadline to comply is one year (January 1, 2027).
- For CTA, companies formed before January 1, 2024, have until January 1, 2025, to file their initial beneficial owner report. Companies formed between January 1, 2024, and December 31, 2024, must file within 90 days of formation. Those formed on or after January 1, 2025, are required to file within 30 days.
Annual reports
- NY LLCTA requires reporting companies to submit an annual statement after filing the initial beneficial ownership disclosure to confirm or update their beneficial ownership information, the street address of their principal office, their status as an exempt company (if applicable), and any other information specified by the New York Department of State.
- CTA mandates that updates to prior reports be filed within 30 days of any changes.
Corrected reports
- For the NY LLCTA, corrected reports can be filed within 90 days of the original beneficial ownership submission.
- CTA allows corrected reports to be filed within 30 days after a company becomes aware of or should reasonably know of any inaccuracies.
Exemption
If an LLC qualifies for one of the 23 exemptions under the CTA, it will also be exempt from the NY LLCTA reporting requirements. Unlike the CTA, which automatically exempts these entities from reporting, the NY LLCTA requires additional steps for an exempt LLC.
Under the NY LLCTA, an exempt LLC must file an attestation of exemption with the New York Department of State. This attestation must be submitted within 30 days of the LLC’s formation or qualification to do business in New York. The filing must include the specific exemption claimed and the basis for that exemption, and it must be made under penalty of perjury.
Penalties
If a reporting company fails to file its beneficial ownership disclosure, attestation of exemption, or annual statement:
- For more than 30 days: The company will be marked as past due in the NYDOS records.
- For more than two years: The company will be classified as delinquent in the NYDOS records.
The New York Attorney General can impose a fine of up to $500 per day for each day the company is past due or delinquent. To resolve this status, the company must:
- Make the required filing
- Pay a $250 fine
- Obtain verification from the Attorney General confirming that all penalties have been paid
Conclusion
The New York LLC Transparency Act brings essential changes for LLCs operating in the state. With new reporting requirements and deadlines, staying informed and compliant is crucial. Understanding these rules and making timely filings can avoid penalties and keep your business in good standing. Consulting with a legal expert can be an intelligent move for tailored advice and ensuring you meet all requirements.
Click here to learn more about the NY LLCTA and get filing details.
