New York LLC Transparency Act: Beneficial Ownership Reporting for Turkish Businesses

New York's LLC Transparency Act (LLCTA), signed into law in December 2023 and effective January 1, 2026, represents a significant expansion of beneficial ownership disclosure requirements for limited liability companies operating in New York. For Turkish businesses and investors who use New York LLCs as investment vehicles, holding companies, or operating entities, the LLCTA creates new compliance obligations that must be understood alongside — and distinguished from — the federal FinCEN Beneficial Ownership Information (BOI) reporting requirements.

The LLCTA amends New York's Limited Liability Company Law to require most New York LLCs to file beneficial ownership disclosure reports with the New York Department of State. The law is modeled in part on the federal Corporate Transparency Act (CTA) but applies specifically to New York-formed and New York-registered foreign LLCs.

The LLCTA applies to:

• Domestic LLCs formed under New York law
• Foreign LLCs registered to do business in New York

The LLCTA provides exemptions for certain entities, including:

• Publicly traded companies
• Entities already subject to extensive federal or state disclosure requirements (banks, insurance companies, registered investment advisers, etc.)
• Large operating companies (more than 20 full-time employees in New York, more than $5 million in gross receipts from New York sources, and a physical office in New York)
• Inactive entities

Important for Turkish investors: Many Turkish-owned New York LLCs used as holding companies or investment vehicles will not qualify for the large operating company exemption and will be required to file.

For each beneficial owner — defined as any individual who, directly or indirectly:

• Exercises substantial control over the LLC, or
• Owns or controls 25% or more of the ownership interests of the LLC

The LLCTA requires disclosure of:

1. Full legal name
2. Date of birth
3. Current residential or business street address
4. A unique identifying number from an acceptable identification document (passport, driver's license, etc.)

"Substantial control" is broadly defined and includes:

• Senior officers (president, CEO, CFO, COO, general counsel, and equivalents)
• Individuals with authority to appoint or remove senior officers or a majority of the board
• Individuals who direct, determine, or have substantial influence over important decisions of the LLC

For Turkish-owned LLCs, this means that Turkish individuals who exercise management authority — even without formal equity ownership — may be required to be disclosed as beneficial owners.

The most significant difference between the LLCTA and the federal FinCEN BOI requirements is public accessibility:

• FinCEN BOI: Information is filed with FinCEN and is not publicly accessible. Access is limited to authorized government agencies and financial institutions with customer consent.
• LLCTA: Beneficial ownership information filed with the New York Department of State is publicly accessible through the state's online database.

This public disclosure requirement has significant privacy implications for Turkish investors and business owners who may have legitimate concerns about the public availability of their personal information, including home addresses and identification document numbers.

The LLCTA includes limited privacy protections:

• Individuals may request that their residential address be withheld from public disclosure if they demonstrate a safety concern
• Minor children's information is protected
• Certain law enforcement and national security exemptions apply

However, the general rule is public disclosure. Turkish investors should plan accordingly and consider whether business addresses (rather than residential addresses) can be used where permitted.

Turkish businesses operating New York LLCs must navigate two parallel reporting regimes:

• Filed with: FinCEN (federal)
• Public access: No — law enforcement and authorized financial institutions only
• Applies to: Most U.S. corporations and LLCs (with exemptions)
• Beneficial owner threshold: 25% ownership or substantial control
• Deadline for existing entities: January 1, 2025 (already passed)

• Filed with: New York Department of State
• Public access: Yes — publicly searchable database
• Applies to: New York domestic LLCs and foreign LLCs registered in New York
• Beneficial owner threshold: 25% ownership or substantial control
• Deadline for existing entities: January 1, 2027

Key point: Filing with FinCEN does not satisfy LLCTA obligations, and vice versa. Turkish businesses must file separately with both authorities if they operate New York LLCs.

Compile a complete inventory of New York domestic LLCs and foreign LLCs registered in New York in which Turkish individuals or entities hold interests.

For each LLC, determine whether any LLCTA exemption applies. Document the basis for any claimed exemption.

For each non-exempt LLC, identify all individuals who:

• Own 25% or more of the LLC's interests (directly or indirectly)
• Exercise substantial control over the LLC

This analysis should account for indirect ownership through chains of entities.

Gather the following for each beneficial owner:

• Full legal name (as it appears on identification documents)
• Date of birth
• Current address (business address preferred for privacy)
• Copy of acceptable identification document

File the beneficial ownership disclosure report through the New York Department of State's online system. Retain confirmation of filing.

Implement procedures to:

• Report changes in beneficial ownership within 90 days
• File annual updates
• Monitor for changes in LLCTA regulations and guidance

The LLCTA provides for civil and criminal penalties for non-compliance:

• Civil penalties: Up to $500 per day for each day of non-compliance
• Criminal penalties: Willful violations may result in criminal liability

Additionally, non-compliant LLCs may face restrictions on their ability to bring legal proceedings in New York courts.

The LLCTA's public disclosure requirement may prompt Turkish investors to reconsider their New York entity structures. Alternatives to consider include:

• New York corporations: Subject to different (and in some respects less onerous) disclosure requirements
• Delaware LLCs: Not subject to LLCTA (though federal FinCEN requirements still apply)
• Restructuring: Consolidating multiple LLCs to reduce compliance burden

For Turkish investors with legitimate privacy concerns, consider:

• Using business addresses rather than residential addresses where permitted
• Engaging registered agent services that provide business address services
• Consulting with counsel about available privacy protections

Turkish parent companies and holding structures that own New York LLCs must trace beneficial ownership through the entire ownership chain. Turkish individuals who are ultimate beneficial owners of New York LLCs through Turkish holding companies are subject to LLCTA disclosure requirements.

The New York LLC Transparency Act represents a significant new compliance obligation for Turkish businesses and investors operating through New York LLCs. The combination of the LLCTA's public disclosure requirement and the federal FinCEN BOI requirements creates a complex dual-reporting landscape that requires careful navigation.

ULF New York advises Turkish clients on LLCTA compliance, entity structure optimization, and the interaction between New York and federal beneficial ownership reporting requirements. Contact us to assess your compliance obligations and develop a tailored compliance strategy.

This article is for informational purposes only and does not constitute legal advice. The LLC Transparency Act and its implementing regulations continue to evolve; consult qualified legal counsel for advice specific to your situation.