New York LLC Transparency Act: Key Requirements and Deadlines

In 2023, fearing that the federal Corporate Transparency Act might not afford state law enforcement adequate access to beneficial ownership information, the New York Legislature passed its own version of a beneficial ownership disclosure law. That law was amended once with the NY Governor’s endorsement and a second amendment is pending. The status of the law is murky because of the pending amendment and the lack of any regulatory attention in New York. Consequently, business owners and attorneys with LLC clients in the State of New York should pay attention to the law’s upcoming implementation.

Background

The federal Corporate Transparency Act (codified at 31 U.S.C. 5336) was adopted by Congress in late 2020 as part of the annual omnibus defense appropriations bill, overcoming President Trump’s veto (the “CTA”). The Financial Crimes Enforcement Network of the U.S. Treasury (“FinCEN”) adopted regulations at 31 CFR 1010.380. Once implemented, the CTA required more than 30 million corporations, LLCs and other legal entities to file a beneficial ownership information report (or “BOI Report”) with FinCEN.  Each BOI Report was required to identify the “beneficial owners” of the reporting company, and entities formed on or after the implementation date also needed to identify the reporting company’s company applicant (defined as the individual who filed the documentation that formed the reporting company).

Each BOI report needed to include specific identifying information for each beneficial owner (and the company applicant, when required). That information included each beneficial owner’s full legal name, residential address, birth date, a unique identifying number (such as a drivers license number or passport) and an image of the document that provided the unique identifying number.

The term “beneficial owner” is complex and requires the reporting company to determine (a) all beneficial owners by virtue of owning an ownership interest of 25% or more, and (b) all beneficial owners who exercise “substantial control” over the reporting company. The calculation of a 25% ownership stake can be complex as it depends on the ownership structure of a reporting company. The determination of “substantial control” could also be complex because of the multi-level definition in the regulations which included a final catch-all provision to include “any other form of substantial control.”

The federal CTA and its implementing regulations prompted significant pushback from the business community.  Several plaintiffs filed suit under various constitutional theories, winning preliminary injunctions that stayed the implementation of the law. Other business groups lobbied the second Trump administration for relief, arguing that the burden on small business with CTA compliance would be too great. Ultimately, this lobbying effort resulted in an Interim Final Rule that took effect March 26, 2025 which left the CTA regulations in place but exempted reporting companies from filing any identifying information with respect to any “United States person.” As a consequence, what would have been a filing obligation for more than 30 million companies was reduced to a filing obligation estimated to apply to fewer than 100,000 companies formed outside the U.S. but registered to do business in the U.S.

The New York LLC Transparency Act

From 2024 through 2025, as the federal CTA was implemented, litigated, and eventually diminished, the New York legislature adopted its own New York Limited Liability Company Act (the “NY LLCTA”).

The initial version of the NY LLCTA was adopted in 2024 and it incorporated by reference several concepts and definitions from the federal CTA. For example, terms like “substantial control” and “ownership interest” in the NY LLCTA refer to those terms as defined in the federal CTA.

After the Interim Final Rule eliminated any CTA filing obligations for U.S. persons, the New York legislature in June 2025 adopted amendments to the NY LLCTA that attempted to eliminate some of the logical inconsistencies and ambiguities that would have resulted from cross referencing the federal CTA.

In Senate Bill 8432 the New York legislature amended the NY LLCTA to make the following changes:

1. Definition of Reporting Company.  Senate Bill 8432 amended the definition of “reporting company” to mean a limited liability company that is either (a) formed by the filing of a document with the New York Department of State, or (b) authorized to do business in the State of New York as a foreign LLC under Article VIII of the New York Limited Liability Company Law.

• Exemptions.  Senate Bill 8432 adopted 23 categories of entities that are exempt from the obligation to file, largely mirroring the same 23 categories of exempt entities contained in the CTA. Those exempt categories include (i) companies with an active securities registration statement, (ii) banks, credit unions, and registered broker-dealers, (iii) venture capital fund advisers, (iv) public accounting firms, (v) tax-exempt nonprofits, (vi) large operating companies (defined as those with more than 20 full-time employees, more than $5 million in revenue, and a physical office in New York), (vii) inactive entities meeting a strict definition of “inactive”.

• Definition of Beneficial Owner. Senate Bill 8432 adopted a new definition of “beneficial owner” that mirrors the CTA definition, with both a (a) greater than 25% ownership test, and (b) a substantial control test.

A Cloud of Uncertainty Over NY Law

Substantial uncertainty remains over the NY LLCTA.  While the January 1, 2026 implementation date remains in place, the New York Governor has not yet acted on the 2025 amendments in Senate Bill 8432. As a result, we literally do not know what the law will require on its implementation date.

Even if Senate Bill 8432 were endorsed into law by the Governor, the NY LLCTA (as amended) would still contain no definition for key terms like “Applicant,” “Substantial Control,” or “Ownership Interest,” as the NY LLCTA still refers to the federal CTA definitions. Because of the Interim Final Rule, however, which exempted all U.S. persons from its scope, it is not clear how the federal definitions would apply in to LLCs in New York.

In addition, the New York Department of State, which is responsible for implementing the NY LLCTA, has made no public statements concerning the law, has launched no website to educate the public, and has not disclosed how it intends to accept reports under the law (which could be due as early as January 1, 2026).

Barring any further changes, LLCs required to report under the NY LLCTA will need to file an initial report (a) within thirty (30) days after the date of formation or qualification to do business (if formed or qualified on or after January 1, 2026), and (b) no later than January 1, 2027 (if formed or qualified prior to January 1, 2026). 

Even entities that are exempt from the duty to disclose beneficial ownership information will need to file an exemption attestation (a) within 30 days of formation or qualification to do business (if formed or qualified on or after January 1, 2026), or (b) by January 1, 2027 (for entities formed or qualified do to business prior to January 1, 2026).

Both exempt and non-exempt reporting companies will need to file an annual statement that either amends or confirms a previously-filed report. (This is in sharp contrast to the CTA which only required an amendment after a change in previously-reported information.)

Reporting companies that are not exempt will need to identify their beneficial owners and provide, for each one, the individual’s full legal name, date of birth, residential or business street address, and unique ID number from a passport, driver’s license, or other government-issued ID. (This is another point of contrast from the federal CTA which permitted only residential addresses, and not business addresses, for beneficial owners.)

The NY LLCTA has significant penalties attached to non-compliance. Reporting companies that fail to report when due will have their record marked “past due.” Reporting companies that fail to report within two or more years will be marked “delinquent”. The New York Attorney General is also empowered to issue fines of up to $500 per day, together with potential suspension, cancellation, or dissolution of the delinquent reporting company.

Unlike the federal CTA, the NY LLCTA does not provide a “FinCEN ID” for individuals, so beneficial owners and company applicants will need to disclose their personal information and will not be able to utilize a FinCEN ID.

Things To Do Now

Notwithstanding the uncertainty that remains, business owners with New York LLCs and their attorneys should:

• Monitor developments coming from New York regarding this issue.
• Inventory entities formed in New York or registered to do business in New York. Flag those entities that might be required to file under the NY LLCTA.
• Identify the beneficial owners and company applicant for each LLC that might be required to file.
• Adopt a compliance policy and appoint a compliance officer to collect the required information and documentation if a filing is required.

This communication is not intended to create or constitute, nor does it create or constitute, an attorney-client or any other legal relationship. No statement in this communication constitutes legal advice nor should any communication herein be construed, relied upon, or interpreted as legal advice. This communication is for general information purposes only regarding recent legal developments of interest, and is not a substitute for legal counsel on any subject matter. No reader should act or refrain from acting on the basis of any information included herein without seeking appropriate legal advice on the particular facts and circumstances affecting that reader. For more information, visit www.buchalter.com.