The new NYTA, like the original, is modelled after the federal Corporate Transparency Act (CTA), which was enacted in 2021 and became effective on January 1, 2024.

On March 1, 2024, New York Governor Kathy Hochul signed into law a new, amended version of the New York LLC Transparency Act (NYTA), replacing the original version that was enacted back in December 2023 (see our prior Alert). The new NYTA will, similar to the original NYTA, require all limited liability companies (LLCs) that are either formed under New York law or that are or seek to be authorized to do business in the state of New York to submit information to the New York Department of State (NYDOS) disclosing the entity’s beneficial owners, unless the entity qualifies for an exemption from such requirements.

The effective date of the new NYTA is January 1, 2026 (a year later than the proposed effective date under the original NYTA). LLCs that are formed in New York or qualified to do business in New York prior to January 1, 2026, will therefore have until January 1, 2027, to make their initial filings. LLCs formed or qualified in New York after January 1, 2026, will have to file within 30 days of formation or authorization.

The new NYTA, like the original, is modelled after the federal Corporate Transparency Act (CTA), which was enacted in 2021 and became effective on January 1, 2024. The new NYTA incorporates some of the definitions used in the CTA, as well as the same 23 exemptions from filing obligations set forth in the CTA.

Although the new NYTA is modelled after the CTA, there are some notable differences:

1. The new NYTA applies only to LLCs, not to other types of business entities, such as corporations, limited partnerships or statutory trusts. Moreover, as noted above, it applies only to LLCs formed under New York law or foreign LLCs qualified to do business in New York.
2. Under the CTA, an entity that falls within one of the 23 specified reporting exemptions is not required to submit any filing. However, an exempt LLC formed or qualified to do business in New York must file an attestation of exemption with the NYDOS.
3. The new NYTA requires that, after an LLC has filed its initial report or attestation of exemption with the NYDOS, it must thereafter file an annual statement confirming the accuracy of the information previously filed or the applicability of the exemption. The CTA, in contrast, only requires amendments when the information in a previously filed report changes.
4. The new NYTA requires information on a reporting LLC’s “company applicants” (i.e., the persons involved in the formation of such entity) to be included in a report, even a report for an LLC formed prior to the law’s effective date. This could prove burdensome for LLCs that formed many years ago, as the company applicants might not be reachable or still alive. The CTA, in contrast, requires inclusion of information on company applicants only in reports by entities formed after the CTA’s effective date of January 1, 2024.
5. The new NYTA does not require a beneficial owner to include a copy of his/her passport or other identifying document.
6. The new NYTA does not contemplate the use by a beneficial owner or company applicant of his/her FinCEN ID (i.e., a personal identifying number issued by the U.S. Department of Treasury’s Financial Crimes Enforcement Network). As a result, the personal identification information of an individual that is a beneficial owner of multiple LLCs formed under New York law or qualified to do business in New York would need to be included in the report filed by each such LLC. Such personal identification information consists of the person’s full name, date of birth, current home or business street address and a unique identifying number for the person from an unexpired passport, state driver’s license or ID card issued by a state or local government agency or tribal authority.

Beneficial ownership information collected by the NYDOS will be stored in a secure database, deemed confidential and made available only:

1. If a beneficial owner consents or requests disclosure of his/her information;
2. Pursuant to a court order;
3. To officers or employees of another federal, state or local government agency where disclosure is necessary for that agency to perform its official duties or to operate a program specifically authorized by law; or
4. For a valid law enforcement purpose, including as relevant to any law enforcement investigation by the New York Attorney General’s Office.

Any beneficial ownership information disclosed by the NYDOS may not be further disclosed by any recipient except as authorized by law or as otherwise necessary to the performance of statutory duties.

If an LLC formed or qualified to do business in New York fails to file its report or its attestation of exemption by the applicable due date, it will be deemed suspended and will not be allowed to conduct business in New York state until the required report or attestation has been filed, at which point the suspension will be deemed annulled and all powers, rights and privileges of the LLC will be restored retroactively. Such a suspension will not limit or impair the validity of any contract or act of the LLC, or any right or remedy of any other party under any such contract. The new NYTA gives the New York attorney general discretion to assess a fine against a delinquent LLC of up to $500 per day for each day the entity’s required report or attestation is past due.

We will continue to monitor the New York Legislature and the NYDOS for amendments to the new NYTA and any proposed rules issued thereunder.

For More Information

If you have any questions about this Alert, please contact Thomas R. Schmuhl, Jocelyn Margolin Borowsky, Joel N. Ephross, Bruce H. Jurist, Hope P. Krebs, Lee J. Potter Jr., any of the attorneys in our Corporate Transparency Act Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.