1-10-24 Client Alert -New York's LLC Transparency Act Becomes Law

On December 22, 2023, Governor Hochul signed the LLC Transparency Act (the “Act”) into law. Unless an exemption applies, limited liability companies (“LLCs”) formed or qualified to do business in New York on or before December 21, 2024 must report their beneficial ownership information to New York by January 1, 2025. If the LLC is formed or qualified after December 21, 2024, then reporting must be made with the LLC’s articles of organization or application for authority to do business in New York.

The Act’s requirements mirror those of the Corporate Transparency Act (the “CTA”), which is the new federal law that became effective on January 1, 2024 and which we previously summarized here. For example, a “beneficial owner” and an “exempt company” are defined by reference to the federal regulations under the CTA. However, here are some of the key differences:

The Act also initially provided for a publicly available database of beneficial ownership information unless an owner obtained a waiver. However, Governor Hochul signed a chapter amendment to restrict the database to government agencies and law enforcement only.

To prepare for compliance, LLCs formed or doing business in New York should develop internal policies to assess and monitor their reporting obligations or exemptions to avoid potential penalties. If you have any questions, please reach out to Kate Polozie, Esq. at (585) 987-2910 or kpolozie@woodsoviatt.com, Danielle Ridgely, Esq. at (585) 987-2914 or dridgely@woodsoviatt.com, or another member of the Business and Tax Department at Woods Oviatt Gilman LLP.