New York LLC Transparency Act -- Narrowed to Only Foreign LLCs -- Effective January 1, 2026

Overview

New York’s Limited Liability Company Transparency Act (“NYLLCTA”) is effective January 1, 2026, but its scope is significantly narrower than originally anticipated. Following Governor Kathy Hochul’s December 19, 2025, veto of Senate Bill S. 8432, the NYLLCTA will apply only to limited liability companies formed under the laws of a foreign country that are authorized to do business in New York.

As a result of the veto, U.S-formed LLCs will not be subject to NYLLCTA reporting requirements under the updated law.

What Changed

When enacted in December 2023, the NYLLCTA was expected to impose beneficial ownership disclosure obligations on a broad range of domestic and foreign LLCs. The statute relied heavily on definitions incorporated by reference from the federal Corporate Transparency Act (CTA).

In March 2025, the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) issued an Interim Final Rule that substantially narrowed the CTA's application, limiting reporting obligations primarily to foreign-formed entities registered to do business in the United States. Because the NYLLCTA incorporated CTA definitions by reference, this federal change automatically narrowed New York's law as well.

In response, the New York Legislature passed Senate Bill S. 8432 in June 2025 to decouple the NYLLCTA from federal definitions and create New York-specific definitions that would have preserved broader state-level reporting requirements. The bill would have expanded coverage to include:

• LLCs formed in New York (created by filing with the NY Secretary of State)
• LLCs formed in other U.S. states and authorized to do business in New York
• Foreign LLCs authorized to do business in New York

Governor Hochul vetoed that legislation on December 19, 2025, stating that New York should not impose disclosure obligations that exceed federal requirements. Because the NYLLCTA still incorporates CTA definitions by reference, the veto effectively limits NYLLCTA’s reach to foreign-formed LLCs, mirroring the current federal framework.

Who Is Subject to the NYLLCTA

Beginning January 1, 2026, the NYLLCTA applies only to:

• Limited liability companies formed outside the United States
• That are authorized to do business in New York

These entities are referred to as foreign reporting LLCs.

Entities Not Subject to the NYLLCTA

The following entities do not have reporting obligations under the NYLLCTA as currently enacted:

• LLCs formed in New York
• LLCs formed in other U.S. states and authorized to do business in New York
• Other U.S. domestic entities otherwise excluded under the CTA framework

Reporting vs. Exempt Foreign LLCs

Foreign LLCs authorized to do business in New York must determine whether they are:

• Reporting companies, required to file beneficial ownership information; or
• Exempt companies, not required to file because they fall outside the reporting company definition

Exemptions generally follow the CTA framework and include certain regulated entities and large operating companies that meet applicable thresholds. These exemptions are incorporated by reference from the CTA rather than being explicitly codified in New York law.

Beneficial Ownership Information Under Current Law

For foreign LLCs that are reporting companies, a beneficial owner is defined by reference to the CTA. Under current federal guidance following the March 2025 Interim Final Rule, U.S. persons are not required to be reported as beneficial owners of foreign LLCs.

A beneficial owner under the CTA framework is any individual who, directly or indirectly:

• Exercises substantial control over the entity, or
• Owns or controls 25% or more of the ownership interests

Compliance Deadlines

Foreign LLCs authorized to do business in New York before January 1, 2026, must file a beneficial ownership disclosure, or confirm their exempt status by December 31, 2026. Foreign LLCs authorized on or after January 1, 2026, must file within 30 days of authorization to do business in New York. All covered foreign LLCs must also file annual updates confirming or amending previously submitted information.

Penalties for Noncompliance

Failure to comply with the NYLLCTA may result in:

• Monetary penalties, including daily fines for continued noncompliance
• Public designation as delinquent
• Suspension or revocation of the LLC’s authority to do business in New York

Practical Takeaways

Foreign (non-U.S.) LLCs authorized to do business in New York should begin preparing for NYLLCTA compliance as soon as possible. U.S.-formed LLCs currently have no action items under the NYLLCTA but should continue monitoring for future legislative changes that could expand the statute’s scope. Businesses with international structures should review ownership and control arrangements to determine whether reporting or exemption filings will be required.

Foreign LLCs authorized to do business in New York should prepare for NYLLCTA compliance immediately. The New York Department of State has published guidance and forms on its Beneficial Owner Disclosure webpage. Additional information and frequently asked questions are available on the state website.