Effective as of January 1, 2026, according to the current New York LLC Transparency Act (“NY LLCTA”), LLCs formed under the laws of a foreign country that are authorized to do business in New York will need to file a beneficial ownership report with the State.
What Is the New York LLC Transparency Act?
The NY LLCTA originally required any limited liability company (“LLC”) formed or authorized to do business in New York to file a beneficial ownership report with the State, unless an exemption applies. The enumerated exemptions include banks, credit unions, insurance companies, and other types of entities. If an exemption applies, the company must still file a statement with the Department of State indicating which exemption they qualify under.
Legislative History of the NY LLCTA and CTA
The NY LLCTA was initially adopted in 2024 and incorporated the key concepts and definitions from the federal Corporate Transparency Act (“CTA”). The CTA, enacted in late 2020 and implemented by the U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”), was meant to combat money laundry and promote transparency of corporate ownership.
The CTA originally required over 30 million U.S. entities to file beneficial ownership information reports identifying their owners, among other information. Following its enactment, the law faced substantial opposition from the business community and was challenged in court, resulting in injunctions and sustained lobbying efforts. These efforts culminated in an Interim Final Rule effective March 26, 2025, which exempted U.S. domestic reporting companies from filing a beneficial ownership report. The federal reporting obligation is now dramatically narrowed and only requires foreign-formed companies registered to do business in the U.S. to disclose its beneficial ownership information.
Following the changes to the CTA, the NY legislature tried to amend the NY LLCTA by establishing a framework independent of the federal statute, which would have required all NY-registered LLCs, regardless of whether it was formed in the U.S. or a foreign country, to file a beneficial information report on an annual basis. The Governor disapproved this bill, noting in her veto memo that the bill “would create a mandate for businesses in New York that is not required under federal law” and that “imposing additional requirements on LLCs is not in the interest of New York State.”
Who Does the Current NY LLCTA Apply To?
With the bill being vetoed, the original NY LLCTA remains unchanged. This means that when the NY LLCTA takes effect on January 1, 2026, it will apply only to LLCs organized under the laws of a foreign country that are authorized to do business in New York. NY LLCs formed under the laws of the United States would not need to file a beneficial ownership report.
What Is a Beneficial Ownership Report?
Assuming the NY LLCTA applies to your company, under the current law, a beneficial ownership report is an annual statement filed with the NY Department of State that includes the following information of a reporting LLC:
- The LLC’s legal name and address;
- The name, date of birth, address and photo ID of each of its beneficial owners (i.e., any individual who either exercises substantial control over the LLC or holds 25% or more of the LLC’s ownership interests);
- The name, date of birth, address and photo ID of a company applicant;
- The LLC’s exempt status, if any exemption applies; and
- Any other information specifically required by the Department of State.
Filing instructions and FAQs are available on the NY Department of State website.
Will the Beneficial Ownership Report Be Publicly Available?
Under the NY LLCTA, a beneficial ownership report will not be publicly available, but only certain government agencies will be able to access the filed beneficial ownership information.
When Will the NY LLC Transparency Act Take Effect?
The NY LLCTA is set to become effective on January 1, 2026. Any existing NY-registered LLC formed under the laws of a foreign country before January 1, 2026, must file a beneficial ownership report with the NY Department of State by January 1, 2027. Any LLC formed under the laws of a foreign country to register to do business in NY on or after January 1, 2026, must file a beneficial ownership report within 30 days of registration.
What Happens if You Fail to Comply with the NY LLCTA?
Any LLC that fails to file the required disclosures within 30 days of the due date will be marked as “past due” on the Department of State’s records. If the LLC fails to file or update its report for more than 2 years, it will be designated as “delinquent.”
For each day the LLC is “past due,” the Attorney General may assess a fine of up to $500. Removing the LLC’s “past due” status will require payment of all such fines plus an additional reinstatement fee of $250.
NY LLCTA Compliance and Legal Guidance
If you conduct business in NY, it is important that you keep an eye on the legislative developments and consult with an experienced attorney familiar with the NY LLCTA and relevant statutes to ensure compliance. Contact a member of our team today.
Romano Law will continue to monitor the legislative developments and update this blog as new information becomes available.
