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On March 1, 2024, Governor Kathy Hochul signed amendments to NY’s LLC Transparency Act  (NY LLCTA) into law. Though modeled on the federal Corporate Transparency Act (CTA), the NY LLCTA only applies to LLCs and not to corporations or other types of business entities formed or authorized to do business in New York.

The legislation’s key defined terms, including “beneficial owner,” incorporate by reference many definitions of those terms in the CTA. Under the CTA, a “beneficial owner” is any individual who, directly or indirectly: (i) exercises “substantial control” over a reporting company; or (ii) owns or controls at least 25 percent of the reporting company’s ownership interests.

When are filings due?

LLCs formed or authorized to do business in NY after January 1, 2026, must file beneficial ownership disclosures or attestations of exemption, as applicable, within 30 days of filing the articles of organization or application for authority.

LLCs formed or authorized to do business in New York before January 1, 2026, have until January 1, 2027, to make their initial filings.

How often does an LLC need to report?

Unlike the CTA, the NY LLCTA will require an annual statement confirming or updating: “(1) beneficial ownership disclosure information; (2) the street address of the principial executive office; (3) status as an exempt company, if applicable; and (4) such other information as may be designated by the Department of State.”

What happens to the beneficial ownership information provided to NY?

Information regarding beneficial owners will be maintained in a secure database and deemed confidential except: (1) pursuant to a written request of or by voluntary written consent of the beneficial owner; (2) by court order; (3) to officers or employees of federal, state or local government who need the information to perform official duties as required by statute; or (4) for a valid law enforcement purpose, including an investigation by the attorney general.

Penalties Under NY LLCTA

Past Due or Delinquent Status

• An LLC that fails to file its beneficial ownership information, attestation of exemption or annual statement for a period exceeding 30 days will appear as past due on the records of the Department of State. If the LLC fails to file any of the aforementioned materials for a period exceeding two years, it will be shown as delinquent.
• The attorney general may assess a fine of up to $500 per day for each day an LLC has been past due or delinquent.
• Once filings are made current, a fine of $250 is paid and the attorney general verifies that any penalties have been paid, past due or delinquent status can be removed.

Suspension for Failure to File

With at least 30 days’ notice from the Department of State, any LLC that fails to file a beneficial ownership disclosure or attestation of exemption is deemed suspended and prohibited from conducting business in New York until such filing has been made.

Dissolution or Annulment

If an LLC is delinquent in filing its beneficial ownership disclosure or attestation of exemption or if it knowingly provides or attempts to provide false or fraudulent beneficial ownership information, the New York attorney general is authorized to bring an action to dissolve or cancel the LLC or to annul the LLC’s authorization to do business in New York.

What Comes Next?

As the NY LLCTA takes effect, LLCs formed under New York law or foreign LLCs authorized to do business in New York should familiarize themselves with the law’s requirements, particularly as to how the NY LLCTA differs from the requirements under the CTA.

If you have questions relating to the Corporate Transparency Act or the New York State LLC Transparency Act, how they might affect your entity or potential planning opportunities, contact our business attorneys, Michael F. McConville at mmcconville@mccmlaw.com or 585-512-3520 or Letty Laskowski at llaskowski@mccmlaw.com or 585-512-3538.

This publication is intended as an information source for clients, prospective clients, and colleagues and constitutes attorney advertising. The content should not be considered legal advice and readers should not act upon information in this publication without individualized professional counsel.

About MCCM

McConville Considine Cooman & Morin, P.C. is a full-service law firm based in Rochester, New York, providing high-quality legal services to businesses and individuals since 1979.  With over a dozen attorneys and a full paralegal support staff, the firm is well-positioned to right-size services tailored to each client. We are large enough to provide expertise in a broad range of practice areas, yet small enough to devote prompt, personal attention to our clients.

We represent a diverse range of clients located throughout New York State and New England.  They include individuals, numerous manufacturing and service industry businesses, local governments, and health care professionals, provider groups, facilities and associations. We also serve as local counsel to out-of-state clients and their attorneys who have litigation pending in Western New York courts.  For more information, please contact us at 585.546.2500.