UPDATED 8/14/24
On December 22, 2023, New York’s governor signed Senate Bill 995B/Assembly Bill 3484A, enacting the New York LLC Transparency Act (NYLTA). The NYLTA is modeled after the beneficial ownership information (BOI) reporting requirements under the Federal Corporate Transparency Act (CTA) that took effect January 1, 2024.
The NYLTA’s new LLC reporting requirement is effective December 21, 2024, amending New York law to require LLCs to disclose personal information about their beneficial owners. While the NYLTA has many similarities to the CTA, there are also numerous differences to be aware of if your LLC conducts business in the state.
The NYLTA requires domestic LLCs and foreign LLCs that meet the definition of a reporting company under the Financial Crimes Enforcement Network (FinCEN) BOI requirements to also file a BOI disclosure statement with the New York Department of State, and to update the information as changes occur.
This means all LLCs, except those that qualify for one of the CTA’s 23 exemptions, must file a BOI disclosure statement when the LLC is organized in the state of New York or when a foreign LLC is authorized to do business in New York.
However, if your company is exempt from federal BOI reporting, and therefore exempt from reporting in New York, your LLC may still have a New York reporting requirement. The NYLTA requires reporting LLCs file a Statement of Exemption with the New York Department of State, indicating which provision(s) of the CTA qualifies your LLC for exemption.
>> Learn more about which companies are exempt from a federal BOI filing in “What Entities are Required to Collect and Report Beneficial Ownership Information”
A beneficial owner is any individual who, directly or indirectly, either exercises substantial control over the LLC or owns or controls at least 25% of its ownership interests.
The following information must be disclosed about an LLC’s beneficial owners:
NYLTA allows both domestic and foreign LLCs to submit to the New York Department of State a copy of their initial federal BOI report filed with the FinCEN, if the report contains all necessary information required by the NYLTA.
| Date of LLC Formation/Authorization to do Business in NY | NY BOI/NY Statement of Exemption Due Dates |
|---|---|
| Before January 1, 2026 | December 1, 2026 |
| On or after January 1, 2026 | 30 days from the date of formation or registration |
Similar to federal BOI requirements, New York requires an LLC to file an amendment when any changes in reported information occur.
| Failure to File a New York BOI Statement … | Consequence(s) |
|---|---|
| For a period exceeding 30 days | Past due status reflected on NY Department of State’s public records until an up-to-date BOI statement is filed. |
| For a period exceeding two years | Notice of Delinquency will be issued to LLC. |
| Within 60 days of the Notice of Delinquency | Delinquent status will be reflected on NY Department of State’s records. To remove the delinquency, an up-to-date BOI statement and a penalty payment of $250 must be remitted. |
Note that while the New York BOI reporting penalty is not presently as severe as the federal BOI provisions, failing to timely remit your New York BOI statements could affect your ability to be in good standing with the New York secretary of state, which has broader legal implications.
The version originally passed by the state legislature would have created a public database of ownership details. However, Gov. Kathy Hochul signed an amended version striking the public database provision. The amendment came amid immense pressure over privacy concerns, including that of international investors who have concerns with how their data would be used by their less stable home governments.
Both the NYLTA and CTA require the disclosure of identifying information about an LLC’s beneficial owners and use the same definitions of a beneficial owner. However, there are many other important similarities and differences between the two Acts.
| Federal CTA | NYLTA | |
|---|---|---|
| Applies to LLCs | Yes | Yes |
| Applies to corporations and other entities | Yes | No |
| Exempts certain entities from reporting | Yes | Yes |
| Requires exempt entities to remit a Statement of Exemption | No | Yes |
| Intends to publicly display the names of beneficial owners through a searchable public database | No | No |
| Requires the reporting of company applicants (the individual who directly files the document that first registers the reporting company, and the individual that is primarily responsible for controlling the filing) | Yes | No |
It is important for all businesses to understand and document these new federal and New York BOI reporting requirements. As both Acts are new, we anticipate they will continue to evolve. There are concerns that still require clarification, which we may see via amendments to the Acts in the coming months. We also noted legislation has been introduced to repeal the NYLTA or even implement a much different BOI reporting regime in the state.
We will continue to monitor New York legislation before the first BOI reporting due dates later this year. While New York is the first state to enact specific BOI reporting, they will likely not be the last, and we will watch closely if other states follow suit. California and Massachusetts have introduced similar legislation, where both states are also proposing public reporting of owners.
Contact Karen Raghanti at kraghanti@cohencpa.com, Hannah Prengler at hprengler@cohencpa.com or a member of your service team to discuss this topic further.
Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.