If you’re running a business or involved in corporate compliance, you’ve likely been keeping an eye on the Corporate Transparency Act ("CTA") and its requirements for reporting beneficial ownership information ("BOI"). Well, here’s some news you might welcome: the Financial Crimes Enforcement Network ("FinCEN") has made a change that affects when and how companies need to comply.

Effective December 1, 2025, certain individuals involved in real estate closings and settlements are going to be required to report and maintain records on non-financed transfers of residential real property to legal entities and trusts pursuant to this Final Rule, 31 CFR Chapter X, RIN 1506-AB54.

Key Points:

• Reporting persons must file a "Real Estate Report" identifying themselves, the legal entity or trust receiving the property, the beneficial owners, the transferor, and the property, along with transactional information.

• A reasonable reliance standard allows reporting persons to rely on information from others, provided it is certified in writing.

• Under the proposed rule, attorneys could potentially be subject to a reporting requirement.

• The final rule includes exceptions for certain transfers, such as those resulting from grants, death, divorce, and bankruptcy.

• Negligent violations of the final rule could result in a civil penalty of, as of the publication of the final rule, not more than $1,394 for each violation, and an additional civil money penalty of up to $108,489 for a pattern of negligent activity.

On December 22, 2023 Governor Hochul signed Bill A3484A amending New York State's limited liability company law and the executive law. This new amendment will significantly transform the landscape of limited liability companies (LLCs) in New York. How will this bill accomplish this? By eradicating anonymous ownership of LLCs. 

This amendment defines beneficial ownership while also mandating the disclosure of beneficial owners upon the formation of an LLC, and publicizing this information in New York State's business entity database. 

This change to the law stems from concerns about the repercussions of anonymous corporate ownership. It highlights the misuse of anonymous LLCs for various illicit activities, including tax evasion, funding criminal organizations, money laundering, and even hindering routine code enforcement.

This legislative move aligns New York State with global efforts to foster transparency in corporate ownership. By mandating disclosure and establishing a public database, this change to the law aims to curtail illicit activities associated with anonymous ownership while protecting genuine privacy concerns through specific exemptions and waivers.

The transparency this law brings will save time, money, and resources for those suing an LLC. This will reduce unnecessary motion practices and other additional steps that had been required in order to determine who to serve when suing an LLC. 

This bill stands as a significant step towards a more transparent and accountable business landscape in New York State.

This law comes into effect on December 21, 2024, 365 days after being signed by the Governor. To learn more about Bill A3484A , click here.