August 31st, 2023

Alert NY LLC Owners: NY Considers Publicizing Your Personal Info

In the dynamic landscape of New York’s business world, change is inevitable, and staying informed is crucial. At Wilkinson Law LLC, our unwavering dedication is to help business owners navigate these changes, ensuring they are well-equipped to fund, grow, protect, and sell their businesses. Recently, a significant risk for LLCs in New York has surfaced—the LLC Transparency Act. Passed by the New York State Assembly, this act, if signed into law by Governor Kathy Hochul, opens the door for the government to publicize your personal information–and other states, like New Jersey, could be next. With potential implications that could make business organization toxic in New York, understanding the crux of this act is paramount for every informed entrepreneur.

The Rationale Behind the Act

In the vast world of corporate governance and the labyrinthine network of business ownership, opacity has often obscured the paths of money, inviting illicit activities such as money laundering and fraud. Recognizing this shadowy realm, Congress, in 2021, took a pivotal step with the passage of the Corporate Transparency Act. This federal mandate pioneered a reporting mechanism for beneficial owners of corporations and LLCs, seeking to unmask these veiled figures for the prying eyes of law enforcement and certain financial entities.
Despite the feder
Despite the federal act’s merits, the beneficial ownership information, guarded within the Treasury Department’s vaults, remained elusive to everyone else, including New York’s municipal entities. Born from this purported need for broader accessibility and transparency, the NY LLC Transparency Act emerged. With its impending nod from Governor Hochul, New York braces itself for an era of enhanced clarity in business ownership—a shift poised to be realized a year after its enactment.

Key Provisions of the Act

Navigating the newly minted NY LLC Transparency Act, it’s vital for businesses to grasp its core tenets, lest they find themselves unprepared for compliance. Let’s shed light on the pivotal elements of this act:

The NY LLC Transparency Act casts its net on “reporting companies” as delineated in the Corporate Transparency Act (CTA). This specifically envelopes LLCs and foreign LLCs that are either formed or registered to conduct business in the Empire State. Notably, there’s relief for some: If an LLC or foreign LLC doesn’t fall under the broad “reporting company” umbrella as per an exemption condition under the CTA, they’ll find sanctuary from the stringent mandates of the NY LLC Transparency Act.

Under the NY LLC Transparency Act, the reporting entities are obligated to furnish details about their “beneficial owners.” This information must be submitted:

  • Full legal name
  • Date of birth
  • Current business street address
  • The beneficial owner’s unique identification number sourced from an ID document specified in the CTA.

The ticking clock of compliance bears two crucial dates. Companies formed prior to the LLC Act’s effective date have until January 1, 2025, to align themselves. However, for those companies formed post this act’s inception, the calendar grants a mere 30 days from their formation or registration date to file their beneficial ownership reports.

With these pivotal guidelines in place, businesses within New York’s ambit are poised to lose any hope for privacy in their business dealings.

Conclusion

We hope this article has been informative and useful for your business. If you have any questions or comments, please contact us at info@wilkinsonlawllc.com. We plan to answer general questions in an upcoming FAQ series. If you need legal advice specific to your situation, please ask to schedule a consultation with an attorney to discuss your company’s goals.

This article is for informational purposes only and should not be relied upon as tax or legal advice. Please consult professionals for advice tailored to your specific situation. The author and publisher assume no responsibility for any errors or omissions or for any actions taken based on the information presented.

Categories: Important Legal News