![]() “Beneficial owner” and “reporting company” are both defined under the NY-LLCTA with reference to the corresponding CTA definitions 14 and “exempt company” under the NY-LLCTA is defined to mean an LLC that is not otherwise defined as a reporting company under the CTA or that meets one of the CTA exemption conditions. ![]() 10 Entities excluded from the CTA’s reporting requirements generally include heavily regulated business entities 11 and “large operating companies” 12.īy contrast, the NY-LLCTA only applies to LLCs formed or operating in New York and to membership interests in LLCs, 13 but not to other business entity types or other possible indicia of ownership, economic rights or control interests. 9 Business entities in existence as of December 31, 2023, have until January 1, 2025, to make their initial BOSS filing entities newly formed in 2024 will have 90 days after entity formation to make their initial BOSS filing and entities formed starting in 2025 will have 30 days after formation to make their initial filing. The BOSS began accepting reports on January 1, 2024. 8 The CTA requires all non-exempt businesses to report direct and indirect, human beneficial ownership, control and service provider information into the FinCEN beneficial ownership secure system (BOSS). When compared to the NY-LLCTA (which is limited to the LLC business entity type only), the CTA applies more broadly to LLCs, corporations, limited partnerships, business trusts and certain other entity types 7 operating in the United States, sweeping in a broad scope of beneficial interests. The NY-LLCTA requires the New York Department of State (DoS) to establish provisions for sharing information with New York agencies and others permitted to access information relating to beneficial owners. As to LLCs operating in New York, the NY-LLCTA defines beneficial ownership, requires disclosure of human beneficial owner identities upon formation or registration and will record LLC beneficial ownership information in a business entity database accessible to law enforcement, government agencies and certain financial institutions. This article outlines the NY-LLCTA and compares it to the CTA, highlighting its contrasting features, as well as considering its impact on the state’s business community. While patterned after (and sharing certain attributes with) the CTA, the New York law has certain differences from the CTA. 5 Such drop has been attributed to a number of factors, including: expiration of the 421a tax abatement program (which expired in 2022) New York’s high taxes New York’s modification of its rent control laws (which has led to “ghost apartments” sitting empty) 6 the dramatic rise in hard and soft construction costs high interest rates and understaffed city offices leading to massive delays in gaining required approvals - all of which has crippled one of the biggest industries in New York City. Particularly, prior to the removal of the public database, the NY-LLCTA threw another obstacle in the way of the New York City real estate community, where land sales dropped 30% year-over-year in the first half of 2023, compared to the first half of 2022. The NY-LLCTA amended New York’s Limited Liability Company Law 4 requiring disclosure of beneficial owners of both domestic limited liability companies (LLCs) and LLCs formed outside New York and operated or qualified to do business in New York. ![]() 3 While the finalized NY-LLCTA was originally expected to go into effect on December 21, 2024, the superseding law delays implementation until January 1, 2026. ![]() Governor Hochul signed the superseding legislation into law on March 1, 2024. Senator Hoylman-Sigal (one of the NY-LLCTA’s original sponsors) introduced superseding legislation on January 5, 2024, as Senate Bill 8059, to affect such removal of the public database in favor of a non-public database accessible only by law enforcement, government agencies and certain financial institutions. 2 Governor Hochul conditioned her approval of the Act on the legislature’s post-approval removal of the Act’s public database component. Riding a wave of ownership disclosure laws began with the passage of the federal Corporate Transparency Act (CTA), 1 on December 22, 2023, Governor Hochul signed New York’s own “LLC Transparency Act” (the NY-LLCTA), passed by the New York legislature on June 29, 2023.
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