New York Governor Signs LLC Transparency Act

New York Governor Kathy Hochul signed into law the LLC Transparency Act. The new law will create a database tool of the beneficial owners of Limited Liability Corporations ("LLCs") that can be accessed by federal, state and local government law enforcement across New York State.

In the approval Memorandum, the Governor stated that "greater transparency would allow accountability for misconduct, such as wage theft, money laundering or abuses by unscrupulous landlords. Individuals committing unlawful activity should not be able to utilize an LLC as a shield against law enforcement." She acknowledged that the bill required changes "to ensure it serves the core purpose of exposing unlawful activity while balancing personal privacy," and that "amendments were necessary to clarify that the database should be accessible only to those in government who have a law enforcement interest in the information."

The new New York law is based on the federal Corporate Transparency Act ("CTA") and adopts the same definition of beneficial ownership as the CTA.

The new law goes into effect on December 23, 2024.