On December 23, 2023, New York Governor Kathy Hochul signed the New York LLC Transparency Act (“NYLTA”), which requires LLCs to disclose beneficial ownership information (“BOI”) to the New York Department of State.  Effective December 21, 2024, the NYLTA will impose separate BOI reporting requirements on New York LLCs, which are also subject to the reporting requirements under the federal Corporate Transparency Act (“CTA”).  McGuireWoods has published prior alerts on the CTA generally, the use of FinCEN identifiers to report BOI, FinCEN’s extension of the time to file from 30 to 90 days for entities created beginning January 1, 2024, and January 2024 updates regarding the CTA.

The requirements under the NYLTA and the CTA are largely the same.  Both statutes provide the same definitions for Beneficial Owner, Reporting Company, and Exempt Company and share the same 23 exemptions from reporting.  Given the similarities in the laws and to reduce duplicative reporting obligations, each LLC required to file a report under the CTA will be permitted to file the same report under the NYLTA with the New York Department of State.

However, the CTA and NYLTA differ in three main respects:

• First, while the CTA provides 90 days for newly formed entities to file their initial reports in 2024, under the NYLTA, newly formed LLCs must file their initial report immediately upon filing the articles of organization for an LLC being formed under New York law or with the filing of the initial application for authority filed by a foreign LLC. 

• Second, in order to take advantage of one of the 23 exemptions from reporting, the NYLTA requires an LLC to affirmatively assert the exemption by submitting a signed statement by a member or manager of the LLC that specifies the exemption(s) upon which the LLC is relying.  

• Third, any LLC that did not affirmatively assert an exemption, or failed to comply with the NYLTA for a period exceeding two years and has not complied after receiving a notice of delinquency, will be displayed as “delinquent” on the records of the Department of State.  To remove the “delinquent” designation, an LLC must file up-to-date BOI information and pay a civil penalty of $250.

For questions about the NYLTA, the CTA, or anti-money laundering (“AML”) compliance, including customer due diligence and beneficial ownership rules, more generally, contact the authors of this article or another member of the McGuireWoods Financial Services & Securities Enforcement team, Government Investigations and White Collar team, Tax & Employment Benefits team, or Corporate & Private Equity team.