New York LLC Transparency Act—A Quick Guide
The New York LLC Transparency Act (NY LLCTA) aims to prevent the misuse of limited liability companies (LLCs) for illicit activities such as terrorism financing and money laundering. This state-level legislation aligns with and is modeled after the federal Corporate Transparency Act (CTA), which requires certain entities to report their beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) starting January 1, 2024.
Although the NY LLCTA mirrors the CTA in most parts, there are notable differences the reporting entities must know about to avoid penalties, which range from fines to business dissolution. For this reason, professional assistance from experienced service providers like Harbor Compliance is invaluable in meeting the regulatory requirements for both transparency acts.
In this article, we’ll explore the critical elements of the New York LLC Transparency Act, compare it to the CTA, and explain the requirements for covered and exempt entities. We’ll also discuss how Harbor Compliance’s expert services can help you adhere to both the CTA and NY LLCTA.
What Is the New York LLC Transparency Act?
The latest, revised version of the New York LLC Transparency Act (NY LLCTA) was signed into law in March 2024 by New York Governor Kathy Hochul. The legislation aims to enhance corporate transparency by requiring LLCs formed and qualified to do business in New York to disclose their beneficial ownership information (BOI). It also aims to curb financial crimes by incorporating key principles from its federal counterpart, the Corporate Transparency Act (CTA).
Covered entities, which are the LLCs subject to this act, must provide information on their beneficial owners. Beneficial owners are defined as persons who:
- Control or own at least 25% of the LLC or
- Have substantial influence over the entity’s decision-making process
Additionally, the act requires disclosure of applicants, who are the persons responsible for filing or directing the filing of the entity’s formation documents.
In its original version, signed into law in December 2023, the NY LLCTA mandated that information on beneficial owners and applicants be made accessible to the general public. However, due to privacy concerns, this provision was amended. According to the latest version of the act, an LLC’s BOI information will be stored in a secure database and can only be disclosed under the following circumstances:
- A court order
- Written consent of the beneficial owners
- Valid law enforcement purposes such as an investigation
- Government agencies requiring the information for official purposes
How Does the NY LLC Transparency Act Differ From the Corporate Transparency Act?
The NY LLCTA follows the framework of the CTA in crucial areas, such as the definition of beneficial owners, the list of exempt entities, and the objective of enhancing transparency in corporate ownership. However, there are key differences between the two acts that reporting companies should keep in mind, particularly regarding:
- The covered entities
- The filing authorities
- The reporting deadlines
- The requirements for exempt companies
- The process of updating BOI
1. The Covered Entities
The scope of the NY LLCTA is limited to LLCs that are either formed in New York or qualified to do business within the state. On the other hand, the CTA has a broader reach, encompassing a variety of reporting entities across the U.S., including corporations, LLCs, and certain nonprofits.
2. The Filing Authorities
According to the NY LLCTA, the New York Department of State receives and manages BOI from the covered entities. In contrast, the CTA designates the FinCEN as the authority responsible for collecting and overseeing this information.
3. The Reporting Deadlines
The NY LLCTA and the CTA impose specific deadlines for submitting the initial beneficial ownership reports. However, the timelines vary depending on when the entity was formed.
According to the NY LLCTA:
- Entities formed before January 1, 2026, must file their first report on or before December 31, 2026.
- Entities that file for formation or registration on or after January 1, 2026, must submit their BOI within 30 days from the date of formation or registration.
Under the CTA:
- Entities formed before January 1, 2024, have till January 1, 2025, to file their initial report to the FinCEN.
- Entities formed in 2024 must file the initial report within 90 calendar days of receiving public notice that the formation is effective.
- Entities formed on or after January 1, 2025, are expected to file the initial report within 30 calendar days of receiving notice that the formation is effective.
4. The Requirements for Exempt Companies
Under the CTA, exempt companies are required to file documentation to prove their exempt status only if they lose the grounds for exemption or become exempt after submitting the initial BOI report.
In contrast, the NY LLCTA requires exempt entities to submit an attestation of exemption to the Department of State annually.
5. The Process of Updating BOI
According to the CTA, entities must notify the FinCEN of any change in BOI within 30 calendar days of the change. If there are no changes, the CTA doesn’t require any reports beyond the initial filing.
On the other hand, under the NY LLCTA, covered entities don’t need to update the Department of State each time a change occurs. Instead, they must file annual reports in which they disclose their BOI, including any changes since the previous report.
New York Beneficial Ownership and Applicant Reporting
The NY LLCTA divides LLCs into two distinct categories: covered entities and exempt entities. Let’s go over the reporting obligations for LLCs in each of the two categories.
1. Covered Entities
Covered entities must submit comprehensive information on their beneficial owners and applicants, which should include the following:
- Their full legal name
- Their address (business addresses can also be used)
- Their date of birth
- A unique and unexpired identification number issued by a local or state government agency or tribal authority
The applicants or beneficial owners do not need to submit a copy of their identification documents with the report.
2. Exempt Entities
Although exempt entities under the NY LLCTA are not subject to the same reporting requirements as covered entities, they must still submit annual filings with the Department of State.
Exempt entities need to file an attestation of exemption form under penalty of perjury. This form must include detailed information that supports their claim for exemption.
New York Beneficial Ownership Reporting Penalties
Exempt and covered entities must submit annual reports after filing their initial report. These reports either update the Department of State on their BOI or confirm their exempt status.
Entities are given 30 days from receiving a notice to file their annual report; otherwise, they will be marked as past due. If an entity remains past due for two years, it will be classified as delinquent. In both cases, an entity will face automatic suspension of their ability to conduct business in New York until they comply with the act’s requirements.
Delinquent or past due entities must pay fines before their status can change. The New York State Attorney General can impose fines of up to $500 per day for each day an entity is delinquent or past due.
The Attorney General can also dissolve or annul an entity’s authorization to do business if it remains delinquent or knowingly provides false information to the Department of State. To restore its status, the entity must file its BOI, pay a separate $250 fine, and ensure all other fines are settled. The Attorney General has to confirm payment before reinstating the entity’s right to operate.
Navigating the New York State LLC Transparency Act Requirements With Harbor Compliance
If you want to remain in good standing and avoid setbacks for your business in New York and beyond, outsourcing your BOI reporting workload to professionals is always a good idea.
With expertise in licensing and regulatory matters, Harbor Compliance provides tailored support for entities needing to adhere to the CTA and NY LLCTA. With our BOI Reporting Service, we can handle the entire filing process on your entity’s behalf, allowing you to focus on managing your core business operations instead of worrying about fines and penalties.
Benefits of Opting for Harbor Compliance’s BOI Reporting Service
By entrusting your BOI reporting needs to Harbor Compliance, you’ll unlock two important benefits:
- Time savings—Outsourcing your BOI workload to professionals can save you up to three hours per every report you need to prepare and submit. When you partner with us, you can dedicate this time to your primary responsibilities and strategic decisions.
- Peace of mind—Harbor Compliance will send automated notifications to remind you to update your BOI or, in the case of NY LLCTA, send an annual report. By automating the tracking process, you reduce the likelihood of missing crucial filings due to human oversight.
Furthermore, our Records Manager, a separate tool within our Compliance Software Suite, lets you efficiently track and manage your entity’s leadership and ownership information. Staying on top of this information is especially important when reporting BOI changes to the FinCEN and the New York Department of State.
How To Order Harbor Compliance’s BOI Reporting Services
Harbor Compliance’s BOI Reporting Service is available for a flat annual fee and includes completing up to four initial, corrected, and updated reports per year on your behalf.
To ensure each client receives tailored support based on their reporting needs, we classify entities into two categories:
- A single business like an LLC or corporation
- Multiple entities
Regardless of the category your entity falls under, you can order our reporting services by following the steps below:
- Visit Harbor Compliance’s service ordering wizard and select the category your entity belongs to.
- Provide relevant details, such as your company name and contact information.
- Double-check the information provided.
- Submit the online form.
Additional Services Harbor Compliance Provides
Our assistance isn’t limited to BOI reporting—we provide various licensing and entity management solutions for organizations operating across the U.S. The table below presents our most popular service categories:
| Category | Services Offered |
|---|---|
| Document filing and retrieval | We provide drop-off filing services and specialize in helping firms secure their certificates of good standing and certified copies. We also assist entities with filing their initial and annual reports. |
| Tax registration | We help entities establish their payroll tax accounts and manage their sales and use tax registrations. We also help firms secure their Employer Identification Number (EIN). |
| Registered agent services | As part of our Registered Agent Service, we’ll receive legal notices on your entity’s behalf and forward them to you in a timely manner. |
| Entity lifecycle management | We assist firms in filing for incorporation, LLC formation, amendment, dissolution and withdrawal, and name reservation. We also help with managing Doing Business As (DBA) requirements. |
| Nonprofit formation | We help nonprofits file necessary documents for incorporation and tax exemption. |
| Business licensing support | We assist entities in securing general business licenses and industry-specific ones (construction, engineering, etc.). |
New York LLC Transparency Act FAQs
Below, you’ll find answers to frequently asked questions about the New York LLC Transparency Act. To learn more, visit Harbor Compliance’s Information Center.
The NY LLCTA includes a so-called “safe harbor” timeline that allows entities to amend false or fraudulent BOI without facing penalties.
If an entity submits an incorrect BOI report to the New York Department of State, it has 90 days to willingly file a revised report. This provision is solely for false or fraudulent BOI and doesn’t include routine updates to accurate reports.
After submitting the initial report, covered and exempt entities are expected to file annual BOI reports or attestations of exemption to the Department of State.
Applicants and beneficial owners can provide any unique and unexpired identification number issued by a tribal authority or a local or state government agency.
Reporting Your Beneficial Ownership Information With Harbor Compliance
The latest BOI requirements imposed by the NY LLCTA and the CTA have significantly increased the regulatory burden for businesses, especially smaller ones with limited experience in regulatory reporting. If you want to outsource this mounting workload and concentrate on your core business operations, order our BOI Reporting Service today.
Additionally, you can use our free Compliance Score™ to check if your organization meets the regulatory requirements of all the states it operates in. If you notice any red flags or issues, reach out to us, and we’ll find a custom solution powered by our robust software suite. If you want to see how our software helps keep you in good standing, schedule a demonstration.
