Stinson Attorneys Analyze CTA vs. NYLTA in Bloomberg Law as Federal Ruling Could Impact Similar State Laws

03.12.2024

Stinson LLP Partner Marc Weintraub and attorney Zachary Taylor co-authored an article for Bloomberg Law, "CTA Ruling Poses Uncertain Future for States With Similar Laws," discussing the current state of the Corporate Transparency Act (CTA) and how the March 1 ruling could impact states considering their own version of the federal law, with a particular focus on the New York LLC Transparency Act (NYLTA).

"Although the ruling applies narrowly to the plaintiffs in National Small Business United v. Yellen, states that have passed or are considering their own version of the CTA likely will feel the effects as the case is appealed," the attorneys write. "The result could be a patchwork of state laws requiring different information from beneficial owners as a protracted battle over how the federal CTA plays out in courts." New York was the first to develop and enact its own version of the CTA, and other states are actively considering their own bills.

The attorneys provide insight on the differences between the CTA and the NYLTA, including the scope of the laws, exemption reporting, database access and the cost of noncompliance. They emphasize privacy concerns and while the NYLTA has less severe penalties than the CTA, businesses still face complex compliance challenges if they fail to comply.

The attorneys say it's unclear whether NSBU v. Yellen will halt efforts in other states to develop a beneficial ownership reporting framework and urge businesses to carefully assess both existing and applicable state laws as the legal landscape evolves.

Taylor's practice is focused on corporate governance, contracting matters, complex business transactions, including mergers and acquisitions and private securities work, and advising private and family businesses in the negotiation, formation, restructuring and succession planning of their businesses. He helps businesses develop, implement and manage their CTA compliance programs.

Weintraub is a seasoned corporate attorney and business executive, adept at representing clients negotiating multimillion-dollar investment and loan transactions involving domestic and international parties. His practice also includes substantial work in energy transactions, project finance, economic development and real estate development.

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