by Stephen D. Hans | Feb 17, 2024 | New York State LLC Corporate Transparency Act
New State Law to Go Into Effect in Late 2024 One of the more attractive benefits of the LLC (limited liability company) form, in New York and elsewhere, has been the minimal reporting and disclosure requirements imposed on this form of enterprise. That is about to change, at least for New York limited liability companies, after Governor Kathy Hochul signed the New York LLC Corporate Transparency Act (the LLCCTA). What Does the LLCCTA Require? The LLCCTA mandates that every limited liability company in New York create a database of its beneficial owners, which will be available to law enforcement and regulatory agencies and authorities to potentially uncover any misconduct related to disclosure of LLC ownership or interests. Legislators believe that such a database will minimize the likelihood that LLCs will be used as essentially “shell” entities to engage in fraud, money laundering or tax evasion, or to otherwise violate state or federal laws governing real estate leasing, government contracts and campaign financing. New York Law Modeled on Federal Law New York legislators say they modeled the new state statute on the federal Corporate Transparency Act (CTA), which went into effect on January 1, 2024. The CTA requires that all covered entities: Register with the Secretary of State in their state Provide specific information, including name and business address, to relevant agencies that monitor and enforce laws governing financial crimes Provide personal identifying information about beneficial owners Update all required information within 30 days of the sale of a business or of any beneficial ownership change The provisions of the LLCCTA apply only to entities set up as limited liability...
