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Do You Need to Register Your Business? Corporate Transparency Act and NYS LLC Transparency Act FAQs

Updated: Feb 21

Business man holding paper with question mark in front of face

A new federal law taking effect in 2024 and a proposed New York State law will both require certain business entities to file reports providing information on the beneficial ownership of the entity.

Frequently asked questions regarding both laws are answered below:

Corporate Transparency Act:

Q: What agency monitors this federal law?

A: Reports will be made to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”).

Q: Who will be required to make reports under this law?

A: Corporations and LLCs, in addition to various other business entities. There are twenty-three categories of entities that are exempt from the reporting requirement. Examples of entities that are not required include banks, credit unions, and tax-exempt entities registered with the IRS.

Q: What is a “beneficial owner”?

A: A beneficial owner is an individual with substantive control over the company, owning or controlling at least 25% of the ownership interest.

Q: Where will the data be stored?

A: FinCEN will store the reported information in a secure non-public database.

Q: When is this law effective?

A: January 1, 2024. Companies created before January 1, 2024, will have until January 1, 2025, to file their initial reports. Companies created on or after January 1, 2024, will have 30 days to file their initial reports.

Q: What will happen if my company does not follow this law?

A: There may be civil and criminal penalties for violations, including a fine of up to $10,000.

New York State LLC Transparency Act:

As of the date of this article, the New York State LLC Transparency Act has not been signed into law by Governor Hochul. We will continue to monitor developments and keep you informed as the legislation progresses and any changes to the proposed law. The questions and answers below are based upon the proposed law, so remain subject to change.

Q: Who will be required to make reports under this New York law?

A: Only limited liability companies are required to report their owners.

Q: When will this law come into effect?

A: The NYS legislature passed the Act in June 2023 and Governor Hochul is expected to sign the Act into law. The law would become effective one year after it is signed. Companies formed on or before the effective date of the Act would be required to file their reports by January 1, 2025. Companies formed after the effective date will have 30 days to file their reports.

Q: Can my business use the same report we filed for the federal Corporate Transparency Act?

A: Yes, a reporting company may satisfy its disclosure requirements by submitting a copy of the report it submitted to FinCEN pursuant to the Corporate Transparency Act.

Q: Where will the data be stored?

A: In a publicly available database. Certain personal and identifying information will be kept confidential, except for the purposes of law enforcement or as otherwise required to be disclosed pursuant to a court order.

What Should Companies Do to Prepare?

These Acts will bring significant new reporting and monitoring burdens that will impact many businesses. Understanding your obligations and staying informed will be essential in navigating this regulatory landscape.

  • For existing entities. Review your current business structure in consultation with your attorney to confirm your understanding of these new laws and to create a plan for filing the proper paperwork.

  • For any new entity formed after January 1, 2024, you should consult with your attorney to ensure the new filing requirements are completed as part of the entity formation process.

As noted above, we will be monitoring the progress, implementation, and compliance challenges of these new requirements. Please contact Joshua B. Beisker or any of our Corporate & Business attorneys with questions at (585) 258-2800 or visit

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