Eleven things to know about New York’s LLC Transparency Act
1. Who has to file.
The New York LLC Transparency Act (NYTA) requires all LLCs formed under New York law (domestic LLCs) or formed elsewhere and registered to do business in New York (foreign LLCs) to file either a beneficial ownership disclosure or an attestation of exemption with the New York Department of State.
2. Effective date.
NYTA is scheduled to take effect on January 1, 2026.
3. Deadline to file beneficial ownership disclosure.
Each reporting company formed or authorized to do business in New York before January 1, 2026 (the effective date) of the NYTA must file its beneficial ownership disclosure, or exemption form if applicable, with the New York Department of State no later than December 31, 2026.
BOI reports, signed by an LLC manager, must be filed electronically in a “form and manner” directed by the NY Department of State (DOS). The NY DOS has not yet issued final implementing regulations and is expected to provide more information about the form to be used for the BOI reports and where the reports must be electronically filed.
4. Reporting Company.
“Reporting company” shall mean a limited liability company that is: (1) created by the filing of a document with the secretary of state; or (2) authorized to do business in the State.
Reporting companies would include cooperative corporations, condominium associations and HOA’s. A coop corporation is formed by filing Articles of Incorporation with the Secretary of State. The Condominium Act requires any Condominium Declaration, and any amendment thereof, to be filed with the New York Department of State and also requires the Declaration, or any amendment, to include a designation of the New York Secretary of State as the agent of the board of managers upon whom process against it may be served. Similarly, HOA’s typically operate as non-profit corporations under the New York Nonprofit Corporation Law, requiring the filing of a Certificate of Incorporation with the Department of State. Therefore, cooperative corporations, condominium associations and HOA’s would be included in the definition of a Reporting Company.
5. Exemptions
There are 23 enumerated exemptions from the disclosure requirements. The exempt entities include securities reporting issuers, banks, credit unions, securities brokers or dealers, venture capital fund advisers, accounting firms, tax-exempt entities, and large operating companies with more than 20 employees and annual gross receipts in excess of $5 million. The NYTA requires the LLC to file an attestation of exemption with the Department of State, under penalty of perjury, within 30 days of the LLC’s formation or qualification to do business in New York,
which includes the specific exemption claimed and the basis for the exemption. Each exempt company formed or authorized to do business before the effective date of the NYTA must file its attestation of exemption with the New York Department of State no later than December 31, 2026.
6. Beneficial Owner.
A beneficial owner is any natural person who directly or indirectly exercises substantial control over the LLC, or owns or controls at least 25% of the ownership interests in the LLC. This includes individuals who may influence decisions through contracts, arrangements, relationships, or other means, not just formal ownership.
Beneficial owners of a cooperative corporation, condominium association or HOA would include all members of the Board of Directors or Board of Managers, since the Board members all work together in the management and control of the business affairs of the entity. If there is a Sponsor, the Sponsor members would also be included as beneficial owners if they exercise substantial control, i.e., direct, determine, or substantially influence important decisions including major expenditures, investments, or the overall business strategy of the LLC or own more than 25% of the LLC’s ownership interests. In addition, any LLC that owns more than 25% of the shares or units would separately be a beneficial owner with disclosure requirements.
Each beneficial owner must be identified by:
full legal name,
date of birth,
home or business street address, and
certain unique information from an unexpired (a) passport; (b) state driver’s license; or (c) identification card or document issued by a state or local government agency or tribal authority for the purpose of identification of that individual.
7. Companies Formed on or After January 1, 2026.
Each reporting company formed or authorized to do business in New York after the effective date must file the beneficial ownership disclosure no later than 30 days after the initial filing of articles of organization or application for authority to do business in New York. The same filing requirement deadline would apply to exempt companies formed or authorized to do business in New York after the effective date.
8. Annual Reporting.
After the reporting company has filed its initial beneficial ownership disclosure or attestation of exemption, as the case may be, it is required to electronically file a statement annually confirming or updating the following; (1) their beneficial ownership disclosure information; (2) the street address of its principal executive office; (3) status as an exempt company, if applicable, and (4) such other information as may be designated by the New York Department of State.
9. Failure to File.
If a reporting company fails to file the beneficial ownership disclosure, attestation of exemption or annual statement, as the case may be, for a period exceeding 30 days, the reporting company will be shown as past due on the records of the Department of State. If the reporting company fails to file the requested information for a period of two years, it will be shown as delinquent on the records of the Department of State. Further, the NYTA authorizes the attorney general to assess a fine of up to $500 for each day the company is past due and/or delinquent. In addition, the New York Attorney General can bring an action to suspend, cancel, or dissolve any delinquent company.
10. The beneficial ownership information is not available to the public.
The beneficial ownership information reported under the NYTA will not be publicly accessible. The law does not authorize public access to this information. Instead, the data is intended for use solely by government authorities to combat illicit activities such as money laundering, tax evasion, and fraud.
11. What you can do now to prepare.
Early preparation following these steps can help you avoid penalties and ensure a smooth compliance process:
Identify your beneficial owners, including all members of the Board, whether there is a Sponsor individual or entity or LLC entity who owns or controls more than 25% of the shares or units.
Gather and securely store the required information for each identified beneficial owner.
Set reminders for compliance deadlines.
Consult with ADAM LEITMAN BAILEY, P.C. to ensure your filings are accurate and timely. The details for the NYTA are still under review and subject to change and implementing regulations have not been finalized. Companies should stay informed about updates as they become available.