LLCs Face Certain Disclosure Obligations Under NY LLC Transparency Act, by Seth Meyer, Esq. and Alisha Talati, Esq.,11-5-2024

New York limited liability companies now have more than a year reprieve to comply with a law that imposes certain disclosure requirements on the beneficial owners and applicants of LLCs.

This past March, New York State Governor Kathy Hochul signed into law amendments to the New York LLC Transparency Act (“NYLTA”). Among revisions, the statute’s effective date was postponed from December 21, 2024 to January 1, 2026.

The law, which is modeled after the federal Corporate Transparency Act (“CTA”), is intended to create more transparency into LLC ownership in an effort to prevent wage theft, money laundering and other unlawful activity that may otherwise go undetected through an anonymous LLC.

Among the bill’s key provisions, non-exempt LLCs formed or authorized to do business in New York are required to report certain information about their beneficial owners and applicants. This information will be maintained in a secure database. However, the information will remain accessible to federal, state and local governmental agencies under certain circumstances.

The database must include, among other things, the full legal name(s) of each beneficial owner, date of birth and current home or business street address.

LLCs formed or authorized to do business in NY prior to January 1, 2026, will have until January 1, 2027, to make their initial filings or attestation of exemption and those formed on or after January 1, 2026, will have to file within 30 days of formation or authorization. Additionally, the bill will allow for corrected reports to be filed within 90 days of the submission of beneficial ownership information.

Certain exemptions do apply for those entities that are exempt from reporting under the CTA. Those exempt entities would still have to file an attestation of exemption with the New York Department of State citing the specific exemption. For more on the federal CTA and how it differs from the NY LLC Transparency Act, read KD’s previous blog here.

While LLCs now have more time to comply with the state law’s requirements, they should continue to monitor developments.

Authors: Of Counsel Seth Meyer and Associate Alisha Talati