New York LLC Transparency Act Took Effect January 1, 2026; U.S.-Formed LLCs Exempt from Reporting Obligations

The New York LLC Transparency Act (NY LLCTA) became effective on January 1, 2026.¹ However, following New York Democratic Gov. Kathy Hochul’s December 19, 2025, veto of SB S8432 — which would have amended the NY LLCTA — the NY LLCTA imposes beneficial ownership information (BOI) reporting obligations only on limited liability companies (LLCs) formed outside of the United States and authorized to do business in New York State. As a result, LLCs formed within the U.S., including U.S. territories, are exempt from reporting obligations under the NY LLCTA, while certain nonexempt foreign LLCs authorized to do business in New York are subject to disclosure obligations under the NY LLCTA. Those LLCs must identify and report their nonexempt beneficial owners to the New York Department of State, comply with ongoing annual filing requirements, and remain attentive to strict deadlines and penalties for noncompliance. Foreign LLCs that qualify for an exemption are not required to report BOI but are still required to file an annual exemption form with the New York Department of State.

Background

The NY LLCTA was initially patterned after the U.S. federal Corporate Transparency Act (CTA), which took effect on January 1, 2024. After a fraught 15 months filled with litigation, injunctions, and filing suspensions,² the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule (the FinCEN Rule) limiting the definition of “reporting company” under the CTA to mean only entities (1) formed under the law of a foreign country and (2) registered to do business in any U.S. state or tribal jurisdiction.³ As a result, U.S. companies were exempted from BOI requirements under the CTA.

Because the NY LLCTA incorporated a number of definitions by reference to the CTA, including “reporting company,” the FinCEN Rule had the unexpected impact of limiting the scope of the NY LLCTA only to LLCs (1) formed under the law of a foreign country and (2) registered to do business in New York state.⁴ Gov. Hochul vetoed SB S8432, which would have restored the NY LLCTA to the broader reporting regime contemplated originally by the CTA, on the grounds that it “imposed additional requirements on LLCs that are not in the interest of New York State.”⁵

Complying with the NY LLCTA

Following the veto of SB S8432, LLCs formed in any U.S. state or territory, including Puerto Rico, are exempt from reporting requirements under the NY LLCTA.

Any LLC that is formed outside of the U.S. is authorized to do business in New York state and does not qualify for an exemption under the NY LLCTA is deemed a “reporting company” under the NY LLCTA. However, it remains unclear which types of foreign entities constitute “limited liability companies” for purposes of the NY LLCTA, given that many jurisdictions recognize various forms of limited liability business entities and the NY LLCTA provides no interpretive guidance.

Reporting companies are required to file initial and annual beneficial ownership disclosure statements with the New York Department of State regarding their applicants and beneficial owners (each further discussed below), including the following:

1. full legal names
2. dates of birth
3. current homes or business street addresses
4. unique identifying numbers from one of the following:
   a.   an unexpired passport
   b.   an unexpired state driver’s license
   c.   an unexpired identification card or document issued by a state or local government agency or tribal authority for the purpose of identification of that individual⁶

Reporting companies that were formed prior to January 1, 2026, will need to file their initial disclosure statements by December 31, 2026, and must thereafter file annual disclosure statements. Companies formed on or after January 1, 2026, will have to file their initial disclosure statements within 30 days of filing an application for authority with the New York Department of State.⁷

Reporting forms are available at https://dos.ny.gov/beneficial-owner-disclosure and must be submitted to dosCorpBOI@dos.ny.gov along with the credit card authorization form for the statutory filing fee of $25.

Beneficial owners

Reporting companies are required to identify all “beneficial owners” — that is, nonexempt individuals (i.e., natural persons) who (1) own, directly or indirectly, at least 25% of the ownership interests of a reporting company or (2) exercise “substantial control” over the reporting company.⁸

An individual exercises “substantial control” if that individual meets any of the following, nonexclusive criteria:

• The individual is a managing member or senior officer;
• the individual has authority to appoint or remove officers or members of the reporting company;
• the individual is an important decision-maker; or
• the individual has any other form of substantial control over the reporting company. If an individual is an “important decision-maker,“ he or she likely holds substantial control. Important decisions are generally decisions regarding the company’s business, finances, and structure.

Reporting companies do not need to report the information of beneficial owners that are citizens of any U.S. state or territory. However, the New York Department of State has not clarified whether a reporting company that has only U.S. citizen beneficial owners must instead file an initial and annual exemption statement.

In addition to U.S. citizens, there are also five categories of individuals excluded from beneficial owner status if certain requirements are met. These exemptions are for (i) minor children; (ii) nominees, intermediaries, custodians, or agents; (iii) employees; (iv) inheritors; and (v) creditors. If an individual falls under one of these exemptions, that individual does not need to be reported; however, the reporting company is not exempt from reporting the BOI of any other nonexempt beneficial owners.⁹

Applicants

An “applicant” under the NY LLCTA is the individual who directly files the document that first registers the foreign reporting company with the New York Department of State. If multiple individuals¹⁰ are involved in the filing, the applicant is the individual primarily responsible for directing or controlling the filing with the New York Department of State.¹¹ Currently, there is no guidance on whether a reporting company must provide information regarding applicants who are no longer employed by the company.

Exempt foreign entities still face filing requirements

Although a foreign LLC that meets one of the 23 exemption categories — which still track those set forth in the CTA — is not considered a “reporting company” under the NY LLCTA, such foreign LLC is still required to file an initial statement of exemption and an annual statement of exemption. The attestation of exemption form is available on the New York Department of State website and, once completed, should be emailed to dosCorpBOI@dos.ny.gov.

Exempt entities include, among others:

• securities reporting issuers registered under the Securities Exchange Act of 1934
• banking organizations
• tax-exempt entities registered with the IRS
• insurance companies¹²

The same filing deadlines that apply to reporting companies to submit their filings also apply to exempt foreign entities to file their initial and annual statements of exemption. Exempt foreign companies that were formed prior to January 1, 2026, will need to file their initial statements of exemption by December 31, 2026, and must thereafter file annual statements of exemption. Companies formed on or after January 1, 2026, will have to file their initial statements of exemption within 30 days of filing an application for authority with the New York Department of State.¹³

Who can file on behalf of the foreign entity

Filings on behalf of foreign LLCs may be made by any individual authorized by the foreign LLC to act on its behalf, such as an employee, owner, or third-party service provider. The filer must provide basic contact information, including the filer’s name and email address, and must certify on behalf of the foreign LLC that the information provided in the filing is true, correct, and complete.¹⁴

Disclosure of BOI

Except in certain limited circumstances, BOI will not be made public without the consent of the beneficial owners. BOI may, however, be disclosed by the New York Department of State for a valid law enforcement purpose, pursuant to a court order or to officers or employees of a federal, state, or local government agency where such disclosure is necessary for the agency to perform its official duties.¹⁵

Failure to comply with the NY LLCTA

Companies that fail to submit the required filings by more than 30 days past their respective deadlines will be marked as “past due” on the New York Department of State records and public databases. The Department of State will provide notice to reporting companies that haven’t met their filing obligations. Such companies will then have an additional 30 days to cure the deficiency prior to becoming designated as a “suspended entity,” at which point they will be prohibited from conducting business in New York state until the required filings are submitted and all filing fees and penalties are paid. If a reporting company fails to file for two consecutive years, it will be designated as "delinquent" and could face state-imposed fines, potentially up to $500 a day, and in certain cases dissolution or cancellation of the LLC.¹⁶

Reporting companies have the opportunity to correct inaccurate information provided within a report with the New York Department of State by filing a corrected report. Companies that knowingly provide, or attempt to provide, false or fraudulent information will face civil penalties and could also be subject to criminal prosecution.

Next steps

Given the narrowing of the NY LLCTA scope, clients should first determine whether they remain subject to any filing obligations under the act and implement any necessary compliance procedures.

1. Confirm Entity Status. Determine whether the company is (a) an LLC (or an “LLC-like” entity) formed outside of the United States and (b) authorized to do business in New York state.
2. Evaluate Exemption Status. If the company is a foreign LLC authorized to do business in New York state, determine whether the foreign LLC qualifies for any of the filing exemptions.
   a. If yes, prepare to file initial and annual exemption statements.
   b. If no, prepare to file beneficial ownership disclosure statements.
3. Identify Beneficial Owners and Applicants. Identify all nonexempt individuals who qualify as beneficial owners and determine the applicable applicant(s), and gather information required for filing.
4. Watch Calendar Deadlines.
   a. If the company was authorized before January 1, 2026, submit initial filing by December 31, 2026.
   b. If the company was authorized on or after January 1, 2026, submit initial filing within 30 days of application for authority.
   c. Prepare to submit required filings annually thereafter.
5. Attend to Future Compliance Procedures. Establish internal processes to track (a) beneficial ownership changes, (b) exemption status changes, and (c) annual filing deadlines. Monitor for additional guidance or regulatory development issued by New York State.

¹ The NY LLCTA was signed into law on March 1, 2024. For more information, see Sidley Update dated March 18, 2024.
² See Sidley Updates dated February 24, 2025, December 31, 2024, December 26, 2024, December 10, 2024, and December 5, 2024. 
³ See Sidley Update dated March 25, 2025. 
⁴ For more information on the BOI reporting requirements originally contemplated by the NY LLCTA, see Sidley Update dated March 18, 2024. 
⁵ Kathy Hochul, Governor of N.Y., Veto No. 164 (2025), https://f.datasrvr.com/fr1/225/34450/Veto_164.pdf.
⁶ For filing instructions, see New York State Department of State, Beneficial Ownership Disclosure Filing Instructions.
⁷ See New York State Department of State, Beneficial Ownership Disclosure Frequently Asked Questions, FAQ Q12.
⁸ See Beneficial Ownership Disclosure Frequently Asked Questions, FAQ Q7.
⁹ See Beneficial Ownership Disclosure Frequently Asked Questions, FAQ Q7.
¹⁰ While the NY LLCTA does not specify a limit on the number of applicants, under the CTA, the number of company applicants is limited to one or two individuals.
¹¹ See Beneficial Ownership Disclosure Frequently Asked Questions, FAQ Q25.
¹² See New York State Department of State, Beneficial Ownership Disclosure Exemptions.
¹³ See Beneficial Ownership Disclosure Frequently Asked Questions, FAQ Q12.
¹⁴ See Beneficial Ownership Disclosure Frequently Asked Questions, FAQ 18.
¹⁵ See Beneficial Ownership Disclosure Frequently Asked Questions, FAQ Q14.
¹⁶ See Beneficial Ownership Disclosure Frequently Asked Questions, FAQ Q21.