Bottom Line Up Front (BLUF): The New York LLC Transparency Act mandates significant reporting requirements starting January 1, 2026, impacting all New York LLCs and foreign LLCs doing business in the state.
Overview of the New Law
The New York LLC Transparency Act (NY LLCTA) is set to enhance transparency in the ownership of limited liability companies (LLCs) operating in New York. Effective January 1, 2026, all LLCs formed in New York, as well as foreign LLCs authorized to operate in the state, must file beneficial ownership reports or exemption attestations with the New York Department of State. This legislative move aims to mitigate illicit activities such as money laundering and wage theft by ensuring that the true owners of these entities are disclosed to the state.
Who Needs to Comply?
Entities that fall under the NY LLCTA include:
- New York-formed LLCs
- Foreign LLCs authorized to do business in New York
These entities are classified as ‘reporting companies’ unless they qualify for exemptions. Exemptions align closely with those outlined in the federal Corporate Transparency Act (CTA) and include publicly traded companies and larger operating entities meeting specific criteria. All exempt LLCs must still file an attestation under penalty of perjury, ensuring compliance with the law.
Filing Requirements and Deadlines
Existing LLCs must file their initial beneficial ownership disclosures or exemption attestations by December 31, 2026. New LLCs formed after the effective date are required to file within 30 days of formation. The information required includes details such as the beneficial owners’ names, birth dates, addresses, and identification numbers, with no option for a FinCEN ID as seen in the federal regulations. Importantly, annual updates to this information will be mandatory.
Compliance Impact
Failure to comply with the NY LLCTA can have severe consequences. Entities that do not file by the deadline will be marked as ‘past due’ after 30 days, and may face escalating penalties, including daily fines of up to $500 and a $250 initial penalty. The New York Attorney General is also empowered to take enforcement actions, which could include suspending operations or dissolving non-compliant LLCs. Unlike the federal CTA, the NY LLCTA does not impose criminal penalties, but compliance is essential to maintain business operations.
For further details on the implications of this new law, you can read more from Holland & Knight and Morgan Lewis.