Handling Exemptions Under New York’s BOI Reporting Law
New York is one of a handful of states that have adopted, or considered adopting, their own requirement that owners of certain business entities report their beneficial ownership information (“BOI”) to state regulators,[1] just as the federal Corporate Transparency Act (“CTA”) requires that such entities report their BOI to the Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of the Treasury.[2] New York’s statute—the LLC Transparency Act[3]—differs from the CTA in that it does not require all non-exempt business entities, but only limited liability companies formed or authorized to do business in New York, to file their BOI with state regulators.[4]
New York’s statute also diverges from the CTA in another important respect. Unlike the CTA, New York mandates that companies claiming an exemption from the reporting requirement file an “attestation of exemption” with the New York department of state.[5] The LLC Transparency Act defines the term “exempt company” by incorporating by reference all 23 of the “exemption[s] enumerated in 31 U.S.C. § 5336(a)(11)(B)” of the CTA.[6]
New York’s LLC Transparency Act takes effect on January 1, 2026. New companies formed after that date which are exempt from reporting under one of the exemptions incorporated from the CTA will have 30 days from the filing of their articles of organization or application for authority to do business in New York to file the attestation of exemption with the department of state.[7] Companies in existence before January 1, 2026 that are exempt from reporting will have until January 1, 2027 to file the required attestation of exemption.[8] Any company that files an attestation of exemption will also be required to file with the department of state an annual statement confirming or updating the company’s status as an exempt company.[9] A company that fails to file a required attestation of exemption or annual statement will be subject to various penalties, including fines for every day a filing is past due and, eventually, dissolution or cancellation of the entity.[10]
An attestation of exemption will be filed electronically, under penalty of perjury, with, and in “such form designated by[,] the department of state.”[11] The exempt company will have to include in the form a statement as to “the specific exemption claimed and the facts on which such exemption is based.”[12] It does not appear that the department of state has yet adopted any rules or regulations indicating what other information will be required to claim an exemption or the procedure for electronically filing an attestation of exemption, including who may be authorized to file an attestation on behalf of an exempt company.
[1] See eMinutes, States Deciding Whether to Follow Feds in Requiring Reporting of Beneficial Ownership Information for Business Entities (Dec. 5, 2024).
[2] The CTA is codified at 31 U.S.C. § 5336. FinCEN’s rule fleshing out the CTA’s BOI reporting requirement is codified at 31 C.F.R. § 1010.380.
[3] See N.Y. L.L.C. Law §§ 1106 – 1108 (effective Jan. 1, 2026).
[4] See id. §§ 1106(b) (definition of “reporting company”), 1107 (reporting requirement).
[5] See id. § 1107(b).
[6] Id. § 1106(c).The full list of exempt entities includes securities issuers, domestic governmental authorities, banks, domestic credit unions, depository institution holding companies, money transmitting businesses, brokers or dealers in securities, securities exchange or clearing agencies, other entities registered pursuant to the Securities Exchange Act of 1934, registered investment companies and advisers, venture capital fund advisers, insurance companies, state licensed insurance producers, entities registered pursuant to the Commodity Exchange Act, public accounting firms, public utilities, financial market utilities, pooled investment vehicles, tax exempt entities, entities assisting tax exempt entities, large operating companies, subsidiaries of certain exempt entities, and inactive businesses. See 31 U.S.C. § 5336(a)(11)(B)(i)-(xxiii); FinCEN, Beneficial Ownership Information Reporting Requirements, 87 FR 59,498, 59,539 n. 186 (Sept. 30, 2022). We have described some of the exemptions more specifically in prior articles. See eMinutes, Insurance Producers Are Exempt from BOI Reporting (May 15, 2024); eMinutes, Accounting Firm Exemption From FinCEN Reporting Applies to Almost None (Jan. 29, 2024); eMinutes, The Large Operating Company Exemption to FinCEN Beneficial Ownership Information Reporting (Jan. 3, 2024).
[7] See N.Y. L.L.C. Law § 1107(d).
[8] See id. § 1107(e).
[9] See id. § 1107(g).
[11] Id. § 1107(b).
[12] Id.