New York’s LLC Transparency Act: Major Update

SUMMARY Governor Hochul’s December 22, 2025 veto of Senate Bill 8432 limits New York’s LLC Transparency Act to only foreign LLCs registered in New York. Domestic U.S. LLCs are exempt. Foreign LLCs must disclose beneficial owners (25%+ ownership or substantial control) by December 31, 2026, with penalties up to $500 daily for noncompliance. The New York Department of State launched the filing portal on December 31, 2025 with a $25 filing fee per submission.

Critical Development: Law Now Applies Only to Foreign Entities

On December 22, 2025, Governor Kathy Hochul vetoed Senate Bill 8432, fundamentally changing the scope of New York’s LLC Transparency Act (NYLTA). The law took effect on January 1, 2026; it applies only to LLCs formed outside the United States that register to do business in New York.

This means domestic LLCs formed in New York or elsewhere in the U.S. are not required to file beneficial ownership reports under the NYLTA. Limited liability companies either formed in New York or in another state and authorized to do business in New York will not be required to disclose beneficial ownership information.

What Happened

The NYLTA originally cross-referenced key definitions from the federal Corporate Transparency Act (CTA). In March 2025, FinCEN issued an Interim Final Rule limiting the scope of the CTA solely to foreign (non-U.S.) companies. Because the NYLTA incorporates by reference the statutory provisions of the CTA and the FinCEN rules, New York’s law automatically adopted this same limitation.

The New York legislature passed Senate Bill 8432 in June 2025 to fix this problem. The amendment would have removed the federal cross-references and embedded the definitions directly into New York law, restoring the original intent to cover both domestic New York LLCs and foreign LLCs registered to do business in the state.

However, Governor Hochul vetoed the bill in December 2025. This means the version of the law that took effect on January 1, 2026, still contains the federal references that limit it to foreign LLCs only. What would have been a filing obligation for more than 30 million companies was reduced to fewer than 100,000 companies formed outside the U.S. but registered to do business in the U.S.

Filing Portal Now Live

On December 31, 2025, the New York Department of State launched the electronic filing portal and published comprehensive guidance materials including filing instructions, official forms and frequently asked questions. The portal is now operational and accepting filings.

Key Filing Details:

Filing Fee: $25 per submission (applies to both beneficial ownership statements and attestations of exemption)
Filing Method: All submissions must be made electronically through the NYDOS portal
Portal Access: Available through the New York Department of State website

Who Must Comply

The law applies to “Reporting Companies,” defined as limited liability companies authorized to do business in New York State that were formed outside the United States. Domestic LLCs—whether formed in New York or any other U.S. state or territory—are exempt and have no filing obligtions under the NYLTA.

Certain entities receive additional exemptions including public issuers, banks, insurance companies, credit unions, governmental authorities, public utilities and entities already subject to substantial federal or state regulation. Investment companies registered under the Investment Company Act of 1940 and certain large operating companies with more than 20 full-time employees and over $5 million in gross receipts also qualify for exemptions.

Unlike the CTA where exemptions are self-executing, exempt companies under the NY LLCTA must submit an attestation statement including the specific exemption claimed and the facts supporting it. Foreign entities subject to the filing requirement can avoid it by creating a wholly-owned subsidiary LLC formed under U.S. law.

What the Law Requires

The NY LLCTA defines “Beneficial Owner” as any individual who, directly or indirectly, either exercises substantial control over the Reporting Company or owns or controls at least 25% of the ownership interests.

An individual exercises substantial control if they serve as a Senior Officer (President, CFO, General Counsel, CEO, COO or manager in the case of an LLC), have authority over the appointment or removal of any Senior Officer or majority of the board, direct or substantially influence important company decisions, or have any other form of substantial control. Substantial control may be exercised directly or indirectly up the chain of ownership.

The term “ownership interest” is broadly construed to include any equity or similar interest (whether conferring voting rights or not), any capital or profit interest, instruments convertible into ownership, options to purchase or sell ownership interests, or “any other instrument, contract, arrangement, understanding, relationship or mechanism used to establish ownership.” An individual may control ownership interests through contracts, joint ownership, nominees, intermediaries, custodians, agents or through ownership of intermediary entities.

Each Reporting Company must file with the New York Department of State a beneficial ownership disclosure identifying each Beneficial Owner and each Applicant. “Applicants” include the individual who directly files the document that registers the entity to do business in the United States and the individual primarily responsible for directing or controlling such filing. Required information for each person includes full legal name, date of birth, current home or business street address (no P.O. boxes), and a unique identifying number from an unexpired passport, state driver’s license or government-issued identification card.

Filing Deadlines

The filing portal became operational on December 31, 2025, and is now accepting submissions. All deadlines are now confirmed:

For Existing Foreign LLCs: All non-exempt Reporting Companies that were authorized to do business in New York on or prior to January 1, 2026, must file their initial beneficial ownership reports or attestations of exemption on or before December 31, 2026.
For New Foreign LLCs: Companies that register to do business in New York State on or after January 1, 2026, have 30 days from registration to submit their reports.
For Exempt Foreign LLCs: Even exempt foreign LLCs must file an attestation of exemption by the applicable deadlines (December 31, 2026 for existing entities, or 30 days after registration for new entities).
Annual Statements: The filing deadline for annual statements has not yet been announced by NYDOS, but all reporting and exempt companies will be required to file annual updates.

Ongoing Compliance Requirements

Each Reporting Company and Exempt Company must file an annual statement confirming or updating its disclosure information, the street address of its principal executive office, exempt status if applicable, and such other information as designated by NYDOS. The filing deadline for the annual statement has not yet been announced.

Companies must also file updated reports within 30 days of any change to beneficial ownership information, including changes in beneficial owners, changes to any beneficial owner’s name, address or identifying document, or changes in who exercises substantial control.

If incorrect information is submitted, a Reporting Company has 90 days to correct any erroneous information. This safe harbor is not available if false or fraudulent information was willfully submitted. Unlike the CTA, the NY LLCTA does not provide for a FinCEN ID equivalent that would permit maintaining a single, updatable profile reusable across multiple submissions.

Penalties for Noncompliance

A Reporting Company or Exempt Company that fails to submit required filings may be suspended and prohibited from conducting business in New York State. Companies that fail to file within 30 days will be marked “past due” and after two years will be listed as “delinquent.”

The New York State Attorney General has expansive enforcement authority, including the ability to impose a $500 fine for each day a company is “Past Due,” seek to dissolve or cancel any delinquent New York-domiciled company (or annul the authorization to do business of any foreign company), or investigate any violation. Individual beneficial owners who cause noncompliance may face personal penalties. Unlike the CTA, the LLCTA does not provide for criminal penalties.

The Federal CTA Context

The New York law was originally designed to operate alongside the federal Corporate Transparency Act to combat shell companies used for money laundering, terrorism financing and other illegal activities. However, the federal requirement has been effectively sidelined for domestic U.S. companies.

Multiple federal courts challenged the CTA’s constitutionality. In March 2024, a federal district court in Alabama ruled it unconstitutional for specific plaintiffs. In December 2024, a Texas federal district court issued a nationwide preliminary injunction blocking enforcement entirely.

In March 2025, the U.S. Department of Treasury announced it would not enforce the CTA against U.S. companies and citizens. FinCEN’s Interim Final Rule on March 26, 2025, revised the definition of “reporting company” to mean only entities formed under foreign law that registered to do business in any U.S. state, effectively exempting all domestic U.S. companies.

This federal situation prompted New York’s attempted amendment through Senate Bill 8432. New York legislators wanted to ensure state law enforcement would have access to beneficial ownership information regardless of federal changes. However, the Governor’s veto means domestic U.S. LLCs remain exempt from both federal and state beneficial ownership reporting requirements.

Complex Ownership Situations

Multi-tiered ownership structures require careful analysis. When an LLC is owned partly or wholly by another entity, you must identify the beneficial owners of that entity who ultimately meet the ownership or control thresholds. This “looking through” entities to find natural persons can become complex with multiple layers of holding companies, partnerships or other entities.

Trusts present particular challenges because beneficial ownership depends on who has effective control. Generally, trustees, beneficiaries with withdrawal rights and grantors who retain certain powers may all qualify as beneficial owners depending on the trust’s terms and operation.

Interpretive Guidance

Because the NY LLCTA incorporates by reference key CTA provisions and FinCEN regulations, it may be reasonable to rely on FinCEN’s guidance when interpreting the NY LLCTA. FinCEN has issued numerous FAQs, a Small Entity Compliance Guide and various interpretive statements addressing how to assess Substantial Control and beneficial ownership look-through requirements. However, the NYDOS has not issued interpretive guidance and has not indicated whether FinCEN guidance is persuasive.

All analyses under the NY LLCTA are highly dependent on specific facts and circumstances. Determining who qualifies as a beneficial owner in complex situations may require professional assistance. Businesses with multiple ownership layers, trust involvement or unusual control arrangements should consider consulting an attorney familiar with entity governance and transparency requirements.

Confidentiality

Beneficial ownership information submitted to NYDOS will be kept confidential, subject to certain exceptions, although the NY LLCTA does not specify implementation procedures. Information may be disclosed pursuant to written request or consent of the beneficial owner, by court order, to other government agency officers or employees where necessary for official duties, or for valid law enforcement purposes including investigations by the New York State Attorney General.

Business owners should assume regulatory agencies and law enforcement can access beneficial ownership data when investigating potential violations. The confidentiality provisions aim to balance transparency for law enforcement with privacy protection for legitimate business owners while preventing anonymous shell companies from facilitating illegal activity. The information should not appear in public searches of business entities.

What This Means for Business Owners

If you own or manage a domestic U.S. LLC formed in New York or elsewhere in the United States, you have no filing obligation under the NYLTA. You do not need to file a beneficial ownership report. You do not need to file an exemption attestation. You do not need to take any action whatsoever regarding this law. This status will only change if laws are modified in the future.

If you own or manage a foreign LLC formed outside the United States that is registered to do business in New York, you must file beneficial ownership information or consider restructuring through a U.S.-formed subsidiary to avoid the requirement. The filing portal is now operational and accepting submissions.

Foreign LLCs subject to the law should identify all individuals meeting the beneficial owner definition by reviewing operating agreements, membership records and actual management practices. Collect required information including legal names as they appear on identifying documents, dates of birth, current addresses and copies of acceptable identification.

The December 31, 2026 deadline for existing entities may seem generous, but collecting accurate information can take considerable time, especially for LLCs with complex ownership structures.

Action Steps for Foreign LLCs:

Confirm your LLC was formed outside the United States and is authorized to do business in New York
Determine if you qualify for an exemption (and prepare attestation if so)
Identify all non-U.S. beneficial owners (25%+ ownership or substantial control)
Collect required information: full legal name, date of birth, street address, and government ID number for each person
Access the NYDOS filing portal and submit your disclosure or attestation
Pay the $25 filing fee
Calendar your annual filing obligations and any update requirements

Looking Ahead

The narrow scope of the NYLTA—covering only foreign LLCs rather than the millions of U.S.-formed entities originally contemplated—represents a dramatic reduction in the law’s impact. The New York legislature may attempt to pass similar legislation in the future to restore broader coverage, but any such effort would require the Governor’s signature.

For now, the vast majority of LLCs operating in New York have no compliance burden under this law. Only the relatively small population of foreign-formed LLCs must navigate the new reporting requirements.

Foreign LLCs should monitor NYDOS announcements regarding annual filing deadlines and any additional guidance or rule changes. The Department of State may issue further clarifications as implementation proceeds throughout 2026.