New York LLC Law and FinCEN’s BOIR under the CTA
New York has implemented a significant change in its laws governing Limited Liability Companies (LLCs). This new reporting requirement in the State of New York is aligned with the Federal government's efforts to enhance corporate transparency through FinCEN's Beneficial Ownership Information Reporting (BOIR) and the Corporate Transparency Act (CTA).
Overview of the New York LLC Law
As of January 1, 2026, New York LLC’s will need to comply with new state regulations designed to increase transparency in business operations. The new “LLC” law in New York mandates that LLCs disclose beneficial ownership information to New York Department of State. This new reporting requirement mirrors the federal requirements established by FinCEN under the Corporate Transparency Act but it has many distinctions that LLC’s formed or registered in New York should take into account.
The Corporate Transparency Act (CTA) and FinCEN’s BOIR
The Corporate Transparency Act was enacted to combat financial crimes and enhance corporate transparency in the United States. This federal legislation mandates that most corporations, LLCs, and similar entities formed by filing with the Secretary of State in their state of incorporation must report their beneficial owners to the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). Beneficial owners are individuals who ultimately own or control an LLC or Corporation, either directly or indirectly.
Starting January 1, 2024, entities must provide detailed information about their beneficial owners, including names, addresses, dates of birth, and identification numbers. FinCEN’s BOIR system is the mechanism through which this information is collected. This data will be stored in a secure, non-public database accessible to law enforcement agencies and other authorized bodies.
Key Deadlines and Compliance Requirements
Entities created or registered before January 1, 2024, must file their initial beneficial ownership report by January 1, 2025. For entities formed after January 1, 2024, the reporting deadlines are as follows:
- January 1, 2024 - January 1, 2025: Entities have 90 calendar days from their creation or registration to file their initial report.
- After January 1, 2025: Entities must file their initial report within 30 calendar days of receiving notice of their creation or registration.
How New York’s Law Aligns with Federal Regulations
New York’s new LLC law closely follows the framework established by the CTA and FinCEN’s BOIR. By requiring LLCs to report beneficial ownership information, New York aims to:
- Enhance transparency in business operations.
- Prevent the misuse of LLCs for illicit activities, such as money laundering and tax evasion.
- Streamline compliance processes by aligning state requirements with federal standards.
This alignment ensures that businesses operating in New York are not burdened with conflicting regulations and can more easily adhere to both state and federal laws.
New York LLC Law Reporting Requirements
- Information Required: LLCs must report detailed information about their beneficial owners. This includes:
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- Full name
- Current residential or business street address
- Date of birth
- Unique identification number from an acceptable identification document (e.g., passport or driver's license)
Annual Updates:
- LLCs must update their beneficial ownership information annually to ensure it remains accurate and current.
- Any changes in beneficial ownership must be reported within a specified period (typically 30 days from the change).
Ongoing Compliance:
- LLCs must maintain records of their beneficial owners and ensure that this information is readily available for inspection by state authorities.
Resources and Guidance for Compliance
To help businesses comply with these new regulations, both New York State and FinCEN offer various resources:
- FinCEN’s BOI Webpage: Provides a Small Entity Compliance Guide, FAQs, key filing dates, and informational videos.
- New York State’s Department of State: Will offer guidance and resources specific to state-level compliance, ensuring that businesses understand and meet their obligations.
Beware of Fraudulent Solicitations
As businesses are preparing to meet these new reporting requirements, it’s essential to remain vigilant against fraudulent solicitations and phishing scams associated with the new Federal and State beneficial ownership reporting requirements. FinCEN and state authorities, including New York, have warned about fraudulent attempts to solicit information under the guise of compliance notices. Official agencies will not send unsolicited requests for information. If you receive suspicious communications, do not respond or click on any links. Report any such activities directly to the appropriate authorities.
Conclusion
The new New York LLC law represents a significant step toward greater corporate transparency, aligning state regulations with federal initiatives under the Corporate Transparency Act and FinCEN’s BOIR. By understanding and complying with these new requirements, LLCs in New York your business may avoid significant penalties associated with non-compliance. For more detailed information and resources, visit the official websites of FinCEN and the New York Department of State.
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