LLC Transparency Act of New York

The LLC Transparency Act of New York (NY LLCTA) introduces new disclosure requirements for limited liability companies (LLCs) operating in the state. Beginning January 1, 2026, LLCs will be required to report their beneficial owners to the New York Department of State (NYDOS). The purpose of the law is to increase transparency and prevent misuse of LLCs for unlawful activities such as money laundering or tax evasion. Any LLC doing business in New York should pay close attention to the new rules, timelines, and enforcement provisions. Failure to comply can result in penalties, including monetary fines and the suspension of the company’s authority to do business in the state. Now is the time for LLCs to begin reviewing their ownership structures and preparing to meet these requirements.

What the NY LLCTA Accomplishes 

The NY LLCTA applies to LLCs formed or qualified to do business in New York. These companies must report their beneficial owners to the NYDOS. The definition of a beneficial owner is almost identical to the CTA. Beneficial owners own or control at least 25% of the LLC—or have significant control over the company. They must provide basic information such as the owner's full legal name, birthday, address, and identification number. For LLCs formed after January 1, 2026, this information must be sent within 30 days. 

Those formed before this date have until January 1, 2027. Information reported will be kept confidential and inaccessible to the public, except by specific government agencies and law enforcement under certain circumstances. This aligns with the federal CTA, which also seeks to prevent illegal activities by increasing transparency. Unlike the federal CTA, the NY LLCTA only covers LLCs, which also applies to corporations and partnerships. LLCs that meet one of the 23 exemptions under the U.S. CTA will also be exempt from the NY LLCTA but must file an exemption.

Failing to Comply with the NY LLCTA

The NY LLCTA also requires annual reports to confirm or update the information on beneficial ownership. If there are changes, LLCs must file corrected reports within 90 days. Companies failing to comply may face hefty fines. The New York Attorney General can impose fines of up to $500 daily for non-compliance. Additionally, an LLC that fails to report or provides false information may be suspended from conducting business in New York until it complies. This suspension can be annulled once the required filing is submitted. 

The Act requires LLCs claiming exemptions to file an attestation of exemption with the NYDOS. This must be filed within 30 days of the LLC's formation or qualification to do business in New York under penalty of perjury. Unlike the federal CTA, which has criminal penalties, the NY LLCTA imposes civil penalties for non-compliance. The Attorney General may also dissolve or cancel an LLC’s authorization to do business if it knowingly provides false information.

Speak with Us If You Need Additional Clarification 

If you own an LLC in New York, it is crucial to understand and comply with the NY LLCTA to avoid penalties. For more information and to ensure your business meets these new requirements, schedule a consultation with Temple Law, PLLC. We can help you navigate these changes and maintain compliance.