New York LLC Transparency Act nearing January 1, 2026 effective date

Dated December 3, 2025

Earlier this year we reported that in March, 2025, the Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Department of the Treasury that combats financial crimes like money laundering and terrorism financing, amended it rules implementing the federal Corporate Transparency (“CTA”) to exempt all “domestic reporting companies”[1] and US persons from the requirement to file beneficial ownership information (“BOI”) with FinCEN. Additionally, the U.S. Treasury Department also announced a temporary suspension of enforcement of the CTA and indicated that it intends to propose additional rulemaking to reshape the CTA’s BOI reporting framework with FinCEN.

States are equally active in this space, including New York which currently has a version of law called the New York LLC Transparency Act(“NYLLCTA”)[2] which is slated to become effective on January 1, 2026. The NYLLCTA applies to limited liability companies (“LLCs”) formed in New York or registered to do business in New York if formed elsewhere. However, the NYLLCTA has been the subject of significant amendments in the shadow of the imposing effective date, that recently have passed both chambers of the New York legislature[3] (“S8432/A8662”).

What are the implications of unsettled New York legislation?

Short answer: due to the enacted NYLLCTA’s reference to the CTA for certain key defined terms, including the seminal definition of “Reporting Company”, the March 2025 action by FinCEN calls into question whether the beneficial ownership reporting obligation under the currently-enacted NYLLCTA applies only to foreign (Non-US) limited liability companies.

S8432/A8662 decouples the law from the CTA, and instead directly incorporates into the New York law the substance of the various defined terms from the CTA. If signed by the Governor, it would cause the New York law to require disclosure to the New York Department of State (“NYDOS”) of the beneficial ownership of more entities than must report to FinCEN under federal law.

The general expectation is that the Governor will sign S8432/A8662 into law prior to January 1, 2026. This article sets out the framework of beneficial ownership reporting assuming S8432/A8662 is enacted (hereinafter, “Amended NYLLCTA”).

General Framework

The Amended NYLLCTA writes directly into law the definition of Reporting Company from the CTA but limits it to LLCs formed in New York or formed elsewhere but authorized to do business in New York State and which do not meet one of the exemptions. The exemptions were also adopted into the Amended NYLLCTA from the CTA text. The exemptions list over twenty types of entities that generally have characteristics of large public issuers/public companies or otherwise regulated by the SEC or the CFTC, regulated in financial/ banking/securities or insurance industries, and certain types of investment vehicles (“Exemptions”).  Also, unlike the CTA, the Amended NYLLCTA only applies to limited liabilities companies, not to corporations, partnerships, limited liability partnerships, or trusts. 

Key takeaways if you are Reporting Company

• A Reporting Company must electronically file a beneficial ownership information report (“BOI” and “BOI Report”), see “BOI Reporting” below, with the NYDOS, unless the entity falls within an Exemption.  The NYSDOS has not yet promulgated any instructions for making this filing.
• Unlike the CTA, there is a filing requirement for a Reporting Company that meets an Exemption. Any Reporting Company relying on an Exemption must electronically file a report with the NYDOS claiming an Exemption from BOI reporting and the reasons therefore (“Exemption Report”).

• Deadlines
  • Reporting Companies formed or registered on or after January 1, 2026 must electronically file the BOI report, see below, within 30 days of such formation or registration.
  • Entities claiming an exemption that are formed or registered on or after January 1, 2026 likewise must electronically file an Exemption Report within 30 days of its formation or registration.
  • Reporting Companies formed or authorized to do business in New York prior to January 1, 2026, must file a BOI Report or Exemption Report by January 1, 2027. 
  • Each filing must be updated annually no later than January 1 each year.  

• Penalties – Failure to file can have several implications:
  • The entity will be  designated as “past due” in the New York records after 30 days and “delinquent” if non-compliant for two or more years.
  •  A fine of up to $500 per day for each day that the filing is past due.
  • The New York Attorney General may also commence an enforcement action seeking to dissolve a New York LLC or annul an authority to do business of a foreign LLC.

BOI Reporting

The BOI Report must disclose identifying information for any individual (subject to certain exceptions) who either (i) owns or controls 25% or more of the Reporting Company’s “ownership interests” or exercises “substantial control” over the Reporting Company or (ii) is responsible for filing or directing the filing of a Reporting Company’s organization or authorization documents in New York (“Applicants“), including, in each case, such persons’:

• Full name;
• Date of birth;
• Current residential or business street address; and
• A unique identifying number from an unexpired government-issued identification document (passport, driver’s license or identity card).

The Amended NYLLCTA does not alter the reference to the CTA for definitions of “ownership interests” which the CTA defines as equity interests, capital or profit interests, convertible interests, and options as well any other instrument, contract, arrangement, understanding, relationship, or mechanism establishing ownership.

Similarly, the Amended NYLLCTA continues to look to the CTA for the criteria governing how to determine an individual as having “substantial control” over a Reporting Company (even if they do not own or control 25% of such Reporting Company’s ownership interests) which would include serving as an officer, controlling a majority of the board or officer appointments, directing or influencing key business matters, or exercising any other kind of influence that is controlling.

The Amended NYLLCTA also continues to rely on the definition of the term “Applicant” from the CTA, which includes two categories of individuals:

• The individual who directly files the document to form the New York LLC that is the Reporting Company or who files the application to authorize a foreign Reporting Company to do business in New York;  and
• The individual who is primarily responsible for directing or controlling a Reporting Company’s filing of the organizational or authorization document.

Unlike the CTA, the Amended NYLLCTA does not provide for the issuance of an ID number; rather, personal information must be directly disclosed in the BOI reports filed with the NYDOS.

What You Should Do to Prepare

To be prepared whether the Amended NYLLCCTA is enacted or whether the originally exacted law is in place, it would be prudent to review organizational structures to identify (i) any LLCs formed or authorized to do business in New York that may qualify as Reporting Companies (ii) evaluate any applicable filing exemptions; and (iii) if you anticipate forming  New York entity early in 2026, to evaluate commercially whether forming the entity before year end, thereby effectively extending the filing date to January 1, 2027, would be prudent for your business.

How we can help

Our role is to assist with reviewing organization charts and evaluating the factual circumstances to evaluate if an Exemption may apply, developing procedures to ensure annual filing updates on a timely basis, identifying beneficial owners, and guiding you in the filing process.

Stay tuned for more developments, as legislation is also pending in California, Maryland and Massachusetts.

[1] Originally defined as a U.S. or tribal entity, corporation, limited liability company and limited liability partnership, created by filing a document with a secretary of state or similar office).

[2] The NYLLCTA was originally signed into law on December 22, 2023 as Senate Bill S995B  and was subsequently amended on March 1, 2024 by Senate Bill S8059.

[3]  New York State Assembly Bill No. A08662A and New York State Senate Bill 2025-S8432.