New York LLC Transparency Act: How might this US State legislation affect your business?

What is the New York LLC Transparency Act?

In December 2023, the State of New York adopted the New York LLC Transparency Act, which generally follows the earlier federal Corporate Transparency Act. However, while the CTA applies to corporations, limited partnerships, limited liability companies and statutory trusts in any US state, the NY LLCTA applies only to non-exempt limited liability companies (LLCs) formed or qualified to do business in the State of New York.

The NY LLCTA will now require all entities to disclose information regarding each of its Beneficial Owners and Applicants.

What changes does the NY LLCTA bring?

Reporting must now include information to establish the identity of verified beneficial owners, such as;

• Full legal name
• Date of birth
• Current address (which, unlike the CTA, can be a business address)
• Unique identifying number from a passport, state driver’s license, or other identification card or document issued by a state or local government agency or tribal authority for the purpose of identification.

What is the timeline?

The NY LLCTA requires all Covered Entities and Exempt Entities formed or registered to do business in the State of New York on or before 1st January 2026 to file an initial disclosure or attestation of exemption, respectively, no later than 1st January 2027.

Any entities formed or registered after 1st January 2026 must file within 30 days of the Covered Entity’s or Exempt Entity’s articles of organization or application for authority to do business within the State of New York, as applicable.

Are there any penalties for non-compliance?

Yes. The NY LLCTA contains both civil and criminal penalties. 

Any Covered Entity or Exempt Entity that fails to file its initial beneficial ownership disclosure, attestation of exemption, or annual statement for a period exceeding 30 days will be marked as past due.  Repercussions include fines as well as being suspended or prohibited from conducting business in the State of New York until such filing has been made.

Will other states be affected?

Other US states, such as California and Massachusetts, are at various stages of adopting legislation similar to the NY LLCTA. However, it remains to be seen if these states will also limit applicability to limited liability companies.

How can Ocorian help?

Ocorian has years of corporate administration expertise, helping to keep companies compliant with local regulations and instil good governance. We can assist with regulatory reporting requirements, submit any mandatory filings to avoid penalties and reduce the risks of fines and/or suspension. Contact us to see how we can support you.