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Jan
30 • 2025
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New York State’s BOI Reporting Law Has Some Real Teeth

Piggybacking on the federal scheme requiring reporting of beneficial ownership information (“BOI”) for non-exempt business entities under the Corporate Transparency Act (“CTA”),[1] New York’s own BOI reporting law—the LLC Transparency Act[2]—will take effect on January 1, 2026. While there is some question as to how effective enforcement of the federal BOI reporting requirement under the CTA will be, New York’s statute has some real teeth to ensure compliance.

Once the LLC Transparency Act becomes effective on January 1, 2026, new companies formed after that date will have 30 days from the filing of their articles of organization or application for authority to do business in New York to file with the New York department of state either their initial BOI disclosure or, for exempt companies, their attestation of exemption.[3] Companies in existence before January 1, 2026 will have until January 1, 2027 to file their initial BOI disclosure or attestation of exemption.[4] Once the initial filings have been made, companies will then be required to file with the department of state an annual statement confirming or updating the BOI information or the status of an exempt company.[5]

A company that fails to file its initial BOI disclosure or attestation of exemption will be deemed “suspended.”[6] A suspended company “shall not conduct business in New York state until its beneficial ownership disclosure or attestation of exemption has been filed” with the department of state, “at which point the suspension shall be deemed annulled and all corporate powers, rights, privileges, immunities, duties and liabilities shall be restored retroactively.”[7] A company that fails to file a required BOI disclosure, attestation of exemption, or annual statement for more than 30 days will also be shown as “past due” on the department of state’s records,[8] which may prevent the company from completing certain business transactions. In addition, the New York State attorney general may assess a fine of up to $500 for each day a company has been past due.[9] The company also has to pay an additional fine of $250 to remove itself from past due status.[10]

There is more. If a company’s failure to file a required BOI disclosure, attestation of exemption, or annual statement continues for a period of more than two years, then the company will be shown as “delinquent” on the department of state’s records,[11] which may lead to the dissolution of a domestic company by proclamation or the annulment of a foreign company’s authority to do business.[12] In addition, the attorney general may assess a fine of up to $500 for each day the company has been delinquent.[13] Any such delinquency may be removed from the department of state’s records only upon the filing of the required information, the payment of a $250 fine, and verification from the attorney general that any penalties imposed by the attorney general have been paid.[14]

All of these penalties may be imposed for what is essentially a negligent failure to file an initial BOI disclosure, attestation of exemption, or annual statement. But the LLC Transparency Act also declares it to be unlawful for any person to knowingly provide, or attempt to provide, false or fraudulent BOI, including a fake identifying photograph or document, to the department of state.[15] Any violation of this prohibition may be investigated by the attorney general, who may bring an action to dissolve or cancel the company that provided the false or fraudulent BOI.[16]

[1] The CTA is codified at 31 U.S.C. § 5336.

[2] See N.Y. L.L.C. Law §§ 1106 – 1108 (effective Jan. 1, 2026). For a general discussion of the LLC Transparency Act, see eMinutes, New York State Revises Its BOI Reporting Law. Thank You New York! (Apr. 8, 2024). Unlike the CTA, the LLC Transparency Act applies only to limited liability companies that are formed or authorized to do business in New York.

[3] See N.Y. L.L.C. Law § 1107(a), (b), (d). For more information about exemptions under the LLC Transparency Act, see eMinutes, Handling Exemptions Under New York’s BOI Reporting Law (Jan. 29, 2025).

[4] See N.Y. L.L.C. Law § 1107(e).

[5] See id. § 1107(g).

[6] Id. § 1108(g). The department of state must give at least 30 days’ notice of such suspension prior to any change of status. Id.

[7] Id. Note that a suspension “shall not limit or impair the validity of any contract or act of such reporting or exempt company, or any right or remedy of any other party under or by virtue of any contract, act or omission of such reporting or exempt company, or the right of any other party to maintain any action or special proceeding on any such contract, act or omission, or right of such reporting or exempt company to defend any action or special proceeding in this state, or result in any member, manager or agent of such reporting or exempt company becoming liable for the contractual obligations or other liabilities of the limited liability company.” Id.

[8] Id. § 1108(a)(1).

[9] Id. § 1108(a)(2).

[10] Id. § 1108(a)(3).

[11] Id. § 1108(b)(1).

[12] See N.Y. Tax Law §§ 203-a, 203-b.

[13] See N.Y. L.L.C. Law § 1108(b)(2).

[14] See id. § 1108(b)(3).

[15] See id. § 1108(c).

[16] See id. § 1108(c), (d), (e)(1).