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New York’s New Law That Mirrors The Corporate Transparency Act

Just when you thought they were done passing laws! After the passage of the Corporate Transparency Act (CTA), other states have passed similar laws with similar aims. Most notably, New York just passed the New York LLC Transparency Act (or NYLTA).

 

NYLTA requires LLCs to report LLC’s ownership information to the New York Department of State (or NYDS). It was passed on December 22, 2023, and takes effect on December 21, 2024.

 

In many ways, this law mirrors the CTA. This is because many of the requirements are the same. For example, the beneficial ownership requirements and reporting company exemptions under both laws are identical.

 

However, there are a few notable differences. Unlike the CTA, NYLTA only applies to LLCs. This means that if you have a corporation (or any other entity) in New York, this law doesn’t apply to you. However, you will still be subject to the CTA’s reporting requirements.

 

Another difference relates to the report timing. Under NYLTA, when an LLC’s ownership changes, you have 90 days to file the amended reports. This is much more lenient than the CTA, where reporting companies only have 30 days to report such changes.

 

The penalties under the CTA are also much steeper. If you miss any of the CTA’s deadlines, you are subject to $10,000 in fines and/or two years in jail.

 

However, NYLTA’s penalties are softer, but still noteworthy. For LLC’s already in existence, the deadline to submit their reports is January 1, 2025. After you miss this deadline by 30 days, your LLC will be listed as “past due.” And if you miss this deadline by 2 years, NYDS will issue a notice of delinquency. Then after another 60 days passes, your LLC will be delinquent. When delinquent, the LLC will have to pay a civil penalty of $250, but that penalty may increase in the future.

 

Before NYLTA was passed, one concern related to privacy. Initially, all the information reported under NYLTA was going to be available to the public. However, Governor Kathy Hochul made an agreement with the state legislature to only make this information accessible to law enforcement agencies.

 

This is beneficial to many LLC owners, especially for its owners who want to remain anonymous. However, just like the CTA, this is another target-rich database for hackers to attack.

 

Will other states follow New York’s lead? That remains to be seen.

 

For more information on the CTA and its reporting requirements, you can schedule a free 15-minute consultation with one of our incorporating specialists by clicking the link here: https://corporatedirect.com/schedule/

 

 

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