New York's new Limited Liability Corporate Transparency Act (LLCTA) is coming. There are important differences, timelines, exemptions, and penalties from the federal Corporate Transparency Act.

What is the federal CTA law?

Effective Jan. 1, 2024, certain businesses operating in the U.S. are required to disclose information about their owners – called Beneficial Ownership Information (BOI) – to the U.S. Treasury Department. Companies can obtain an ID number from the U.S. Financial Crimes and Enforcement Network (FinCEN ID) for use in their BOI reporting. The federal law has seen a hopscotch of legal challenges and delays across the country. The federal CTA enforcement deadline to file an initial, updated and/or BOI report as of today is March 21, 2025. New companies formed or registered on or after February 18, 2025 will have 30 days. Previously granted disaster relief deadlines will remain in effect.

Who will New York's new LLCTA affect? 

The New York LLCTA will affect all Limited Liability (LL) Entities doing business in the State of New York, regardless of where or when they were formed. The information which must be reported and specific timelines differ for each and are outlined below.

What information must be disclosed under the NY LLCTA?

The NY LLCTA will require LL Entity disclosure of the names, IDs, and home or businesses addresses of all individuals who own or benefit from 25% or more of the entity, or have substantial control over the entity, even if they do not own it. These individuals are considered Beneficial Owners. However, FinCEN 12-digit ID numbers used for federal CTA reporting will not be usable for NY’s LLCTA. Also, filing a copy of the ID document (such as a driver's license) will not be required.

How will LL entitles file their required forms?

Filing will be made electronically through the State’s designated portal. 

Will the disclosures be confidential?

Yes, at this time the NY law, unlike its initial draft, now states reported information will not be made available to the general public. Instead, it will be accessible only where appropriate by state governmental offices, or by court order, or for other law enforcement purposes. 

Are there any LLCTA exemptions?

Yes. LL Entities will either be designated as Covered Entities or Exempt Entities. All will be required to file their respective reports with the State of New York. There are currently 23 exemptions from reporting BOI under the NY LLCTA, and they mirror those in the federal CTA. They include large entities that have 20 or more employees, do $5 million of annual business, and have a physical office in the U.S. They also include tax exempt entities, investment advisors and venture capital fund advisors that are registered with the SEC, publicly traded entities, charitable organizations, and other regulated entities that already disclose this information to other government agencies. 

What reports will all LLCs be required to file under the NY LLCTA?

There are three types of reports under the NY LLCTA. The first is an Initial Report. The second is an Annual Update. The third is a Corrected Report. 

Entities will be required to file their Initial Report either as a Covered Entity disclosing their ownership and contact information, or as an Exempt Entity by instead filing an Attestation of Exemption. 

LL Entities will thereafter be required to file Annual Updates, confirming either that their ownership status or exempt status has not changed, or making any needed updates. Unlike the federal CTA, entities are not required under the NY LLCTA to update changes to their status or ownership within 30 days from when they occur. 

LL Entities may file a Corrected Report. Any error, whether by mistake or fraudulent with willful intent to evade, must be corrected within 90 days. The law states honest mistakes corrected within 90 days will not incur a penalty. 

What are the timelines for reporting?

LL entities formed on or before January 1, 2026, will have one year to file their Initial Report. Those formed after January 1, 2026, will have 30 days following the filing of their establishment documents in New York to file their Initial Report. Thereafter, whether filing a Report or an Attestation of Exemption, all LLCs must file an Annual Update within 30 days of their due date.

What are the penalties for late filing?

At this time, the law states LLC entity filings that are more than 30 days late will be considered past due. If a filing is past due for two or more years, it will be considered delinquent. Fines of up to $500 per day can be assessed against past due and delinquent entities. 

Upon notice from the State of New York, LL entities that fail to file their required NY LLCTA obligations within 30 additional days can be suspended from conducting business in the State of New York. 

Further, the New York Attorney General can bring an action to dissolve, cancel or annul any LL entity's authorization to conduct business in the state for failure to comply with NY LLCTA. 

Late filers can bring their status current by paying a $250 late fee and obtaining permission from the attorney general's office stating any assessed fines have been paid.

Are there similar laws in other jurisdictions?

Yes, other states are also passing their versions of similar corporate transparency/beneficial ownership laws, including California, Massachusetts, Maryland, South Dakota, and Washington, D.C. Some are not limited to LL entities, and some are allowing public disclosure of BOI. 

Are changes expected?

There will likely be legal challenges to the NY LLCTA, similar to those we are seeing in 27 other states, to various aspects of state and federal corporate transparency/BOI reporting laws. However, in New York, we are less likely to see the deadlines delayed substantially.

 

This blog is for general knowledge purposes and is not intended to be a sole source of information for any specific situation. Our posts are not a substitute for individual legal advice. The laws are constantly changing and differ in other jurisdictions. If you have questions or concerns about your situation, we invite you to contact us for further information and guidance. We would be pleased to speak to you.