New York LLC Transparency Act Took Effect January 1, 2026

New York, N.Y. (January 8, 2025) - The New York LLC Transparency Act (NYLTA) became effective January 1, 2026, and requires the disclosure of information concerning the beneficial owners of certain limited liability companies (LLCs) authorized to do business in New York. The NYLTA requires LLCs formed under the laws of a foreign country that are authorized to conduct business in New York to make certain beneficial ownership disclosures or to file an exemption form if they are deemed exempt from the disclosure requirement. At present, New York LLCs and LLCs that are formed in another state in the United States or in a U.S. territory, including Puerto Rico, that are authorized to do business in New York State, are exempt from the reporting requirements under the NYLTA.

Background

On March 1, 2024, the NYLTA was enacted into law. This legislation mandated that all LLCs formed or registered to do business in New York State submit beneficial ownership information to the New York Department of State (DOS), providing the names and relevant details of the "beneficial owners" of the LLC. The NYLTA's definitions for core terms closely aligned with those of the federal Corporate Transparency Act and its implementing regulations (CTA), which initially required all entities that were formed or registered to do business in the United States, whether formed in the U.S. or in a foreign country, to make beneficial ownership disclosures with the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN), unless they qualified under a specific exemption delineated under the CTA.

However, in March 2025, FinCEN issued an Interim Final Rule (IFR) that narrowed the CTA's scope, by limiting its beneficial ownership reporting requirements to entities that were formed under the laws of a foreign country and registered to conduct business in the U.S. In 2025, the New York State Legislature responded by passing Senate Bill 8432 to amend the NYLTA, introducing standalone definitions for key terms, including the definition of reporting companies. However, on December 19, 2025, New York Governor Hochul vetoed this measure. Thus, as a matter of statutory interpretation, the NYLTA is presently limited solely to foreign limited liability companies registered to do business in the State of New York.

Reporting Requirements under the NYLTA

Under the provisions of the NYLTA, a "Reporting Company" is an LLC that was formed outside of the United States and is authorized to do business in New York State. Unlike the CTA, which applies to all types of entities, the NYLTA only applies to limited liability companies and not to any other type of entity. Section 102 (K) of the New York Limited Liability Company Law (the "Act") defines a foreign limited liability company as:

... an unincorporated organization formed under the laws of any jurisdiction, including any foreign country, other than the laws of this state (i) that is not authorized to do business in this state under any other law of this state and (ii) of which some or all of the persons who are entitled (A) to receive a distribution of the assets thereof upon the dissolution of the organization or otherwise or (B) to exercise voting rights with respect to an interest in the organization have, or are entitled or authorized to have, under the laws of such other jurisdiction, limited liability for the contractual obligations or other liabilities of the organization.

Reporting Companies are required to file an initial and annual beneficial ownership disclosure statements with the DOS.

An "Exempt Company" is defined under the NYLTA to include a limited liability company or foreign limited liability company not otherwise defined as a Reporting Company that meets or satisfies one of the 23 exemptions enumerated in 31 U.S.C. § 5336(a)(11)(B) of the CTA. Exemptions under the CTA include, among others, public issuers, banks, insurance companies, and other regulated entities. Foreign limited liability companies that satisfy one of the 23 exemptions are not required to file beneficial ownership disclosure forms but are required to file an "attestation of exemption" or a sworn statement confirming their exempt status.

Beneficial ownership disclosure reports and attestations of exemption from beneficial ownership disclosure forms are available on the DOS website.

Disclosure of Beneficial Owners

Beneficial ownership information refers to identifying information about any individual, unless otherwise excluded, who exercises "substantial control" over or owns 25% or more of a Reporting Company that was formed in a foreign country and is authorized to do business in New York. The identifying information includes:

1. full legal name;
2. date of birth;
3. current home or business street address; and
4. a unique identifying number from: (i) an unexpired passport; (ii) an unexpired state driver's license; or (iii) an unexpired identification card or document issued by a state or local government agency or tribal authority for the purpose of identification of that individual.

There are five exceptions to the definition of beneficial owner: (1) minor children, (2) nominees, intermediaries, custodians, or agents, (3) employees whose substantial control or economic benefit comes solely from their employment (and who aren't senior officers) are excluded, (4) inheritors with only a future right to inherit an interest, and (5) creditors.

Reporting Companies are not required to include beneficial ownership information for owners that are U.S. persons.

Filing Deadlines for Beneficial Owner Statements and Attestations of Exemption

Effective January 1, 2026, foreign limited liability companies must file either a beneficial owner disclosure statement or attestation of exemption, as applicable, within thirty (30) days of filing an application for authority with the DOS. Foreign limited liability companies authorized to do business in New York prior to January 1, 2026, must file a beneficial owner disclosure statement or attestation of exemption, as applicable, by December 31, 2026. Reporting Companies and Exempt Companies must also file an annual statements confirming or updating its beneficial ownership disclosures.

Confidentiality

Beneficial ownership information submitted to the DOS will be kept confidential, subject to certain exceptions. Beneficial ownership information may be disclosed by the DOS (i) pursuant to the written request of or by voluntary written consent of the beneficial owner; (ii) by court order; (iii) to officers or employees of another federal, state or local government agency where disclosure is necessary for the agency to perform its official duties as required by statute or necessary to operate a program specifically authorized by law; or (iv) for a valid law enforcement purpose including as relevant to any law enforcement investigation by the office of the New York State Attorney General.

Penalties for Failing to File

A Reporting Company that fails to file its beneficial ownership disclosure information or an attestation of exemption, as applicable, for a period exceeding 30 days will be shown as "past due" in the records of the DOS. If the failure to report exceeds a period of two years, it will be shown as "delinquent" and the Office of the Attorney General may assess a fine of up to $500 for each day the Reporting Company has been past due or delinquent in filing and may bring an action to dissolve or cancel the entity (or seek to annul the foreign limited liability company's authorization to do business in New York) that is delinquent in filing.

Consideration and Conclusion

Foreign limited liability companies that seek to register to conduct business in the State of New York should be prepared for this new reporting requirement. Foreign should first determine whether they are subject to the requirements of the NYLTA and, if so, identify the applicable filing deadlines. By planning proactively and assessing their compliance obligations in advance, LLC owners will be better positioned to navigate the NYLTA's requirements and avoid potential penalties for noncompliance.

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