New York LLC Transparency Act vs. Federal Corporate Transparency Act: A Guide for New York LLCs
The recently enacted New York LLC Transparency Act (NY LLCTA) was amended by Gov. Hochul at last month. It is based on the federal Corporate Transparency Act (CTA), and as such, bears significant similarities. However, the two acts are nonetheless distinct and have different scopes and timeframes. Here is a look at NY LLCTA, how it compares with CTA, and how businesses can remain compliant with both.
Understanding the New York LLC Transparency Act
The NY LLCTA, effective Jan 1, 2026, mandates the reporting of beneficial ownership information for limited liability companies (LLCs) formed or qualified to do business in New York State. This means LLCs must disclose details about individuals who own and control 25% or more of the company’s voting interests or profits.
Key Requirements of the New York LLC Transparency Act
- Reporting Entities: All LLCs formed in New York or registered to do business within the state are required to file a beneficial ownership report (BOR) with the New York Department of State (DOS).
- Beneficial Ownership Information: The BOR must include the name, date of birth, residential address, and a unique identifying number (issued by the IRS) for each beneficial owner.
- Exemptions: Certain types of LLCs are exempt from the NY LLCTA’s reporting requirements. These include publicly traded companies, certain investment funds, inactive businesses, and entities exempt from CTA.
How Does the New York LLC Transparency Act Differ from the Corporate Transparency Act?
While the NY LLCTA shares similar goals with the federal CTA, there are some key distinctions:
- Scope: The NY LLCTA applies solely to New York LLCs, whereas the CTA covers a broader range of business entities, including corporations.
- Exemption Filings: Unlike the CTA, the NY LLCTA requires exempt LLCs to file a certification with the DOS claiming their exemption.
- Public Access: A significant difference lies in public access to the reported information. The NY LLCTA initially proposed a public database, but this has been put on hold. Conversely, the CTA mandates a secure, government-only database for BOR information.
- Filing Deadlines: As per the NY LLCTA, businesses formed or qualified to do business in New York State on or after Jan. 1, 2026 will have 30 days to comply, while those formed or qualified prior to that date will have until Jan. 1, 2027. Under the CTA, reporting companies formed prior to Jan. 1, 2024 have until Jan. 1, 2025 to comply, while companies formed Jan. 1, 2024 through Dec. 31, 2024 have 90 days to comply. Those formed on or after Jan. 1, 2025 have 30 days.
- Correction Timeframes: The NY LLCTA allows for corrected reports to be filed within 90 days of submission, while the CTA has a tighter 30-day window.
- Penalties: The NY LLCTA imposes a $250 civil penalty for non-compliant LLCs after two years of delinquency. Additional fines of $500 per day may be accrued for each day past due. The CTA carries potentially harsher civil and criminal penalties for non-compliance.
Complying with Both Acts: How BPS Can Help
Since both the New York LLC Transparency Act and the Corporate Transparency Act may apply to your LLC, it’s crucial to understand the requirements of each act and ensure compliance with both.
The veteran attorneys of our Corporate Law Practice Group can assist your LLC with navigating the nuances of these similar acts. Contact Robert Braumuller at (914) 287-6185 or rbraumuller@bpslaw.com to stay compliant.