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 companies under the laws of the state of New York. Under the terms of the LLCCTA, a limited liability company has 90 days after the sale or change of beneficial ownership to make the disclosures that the law requires.
Let Stephen Hans & Associates Handle Your Employment Law Concerns
At Stephen Hans & Associates, our attorneys are glad to answer your questions and provide legal advice. Years of experience have provided us with extensive knowledge regarding employment law. We have successfully represented many employers throughout the greater New York City area in litigation involving workplace disputes. Our offices are conveniently located in Long Island City with easy access from Manhattan.