NYS LLC Transparency Act Becomes Effective

The LLC TA was adopted in 2024 to piggyback onto the disclosure requirements of the CTA. It requires domestic and foreign limited liability companies formed or qualified to do business in New York (absent an exemption) to file information as to their “beneficial owners” in a registry to be created by the New York State Department of State (DOS). As a shortcut (and so as to not duplicate information already required under the CTA), it incorporated by reference the exemptions from reporting contained in the CTA and largely followed the Federal definition of beneficial owners whose information had to be filed. The LLC TA contemplated that the DOS would establish a registry in which this information would be filed and regulations or other rules governing the filing. Entities required to file (“reporting companies”) are those created or first qualified in New York State after January 1, 2026. Reporting companies would have to make an initial filing within 30 days after first filing articles of organization or an application to conduct business. Entities already existing or qualified in New York State before January 1, 2026, would first have to file by January 1, 2027.

The definitional shortcuts taken by New York State backfired when, in March 2025, under control of the new Trump administration, the Federal regulations governing the CTA were modified to limit the definition of “reporting companies” that are required to file information as to beneficial owners and to limit the scope of the term “beneficial owners.” Presently, only non-U.S. entities are included in the definition of “reporting companies,” and only individuals who are not U.S. persons will have to be identified (although the Federal government has announced that it is working on a regulatory revision to further modify these definitions).

This left New York State with a choice. It could amend the LLC TA to decouple its definitions from the Federal regulations and revert to a broader scope of disclosure or it would have to settle for a disclosure law that required only a de minimis pool of entities to be disclosed. The New York State Legislature chose the former, adopting an amendment of the LLC TA in mid-2025 that would have reinstated the original CTA definitions. However, on December 19, 2025, Governor Hochul vetoed the amendment on the grounds that it “would create a mandate for businesses in New York that is not required under Federal law.” So the new, limiting Federal regulations now govern the New York filings.

This left New York State with a problem. As of the veto date, the State had not issued any regulations, Frequently Asked Questions (FAQs) or other guidance governing the LLC TA, nor had it officially created forms of returns or a registry into which returns could be submitted.

On December 30, 2025, materials appeared on the official website of the DOS addressing the absence of guidance. The DOS website was populated with a new “Beneficial Owner Disclosure” section containing a brief description of the statute, a list of FAQs, a list of exemptions that would allow an entity to not file a list of beneficial owners and a promise that, “starting January 1 [2026], a PDF form will be available [for download] to submit Disclosure Statements” to the DOS.

To briefly summarize the results:

Who must file? Only foreign (i.e., non-U.S.) limited liability companies qualified to do business in New York State must file, unless subject to an exemption incorporated by reference from the CTA into the LLC TA. Thus, entities formed in any state or territory of the U.S. are exempt. The FAQs provide no guidance as to the definition of a non-U.S. entity that would be considered a limited liability company when the foreign governing statute does not use that term. Entities qualified in the State after January 1, 2026, will have to file within 30 days after qualification, which will comprise a quite limited pool. Entities qualified prior to January 1, 2026, must file a statement of beneficial ownership by December 31, 2026. Unlike the CTA, exempt entities must file an annual statement setting forth the applicable exemption(s) (with the first filing due within the initial 30-day period or for pre-2026 entities, by December 31, 2026). It appears that an entity exempt solely because it is a U.S. entity need not file an attestation of exemption.

Filings (both those identifying beneficial owners and those attesting to exemptions) must be updated annually, even if there has been no change since the last preceding filing.

What must be filed? A Disclosure Statement (form to be posted by January 1, 2026) must be filed electronically in the registry (to be described) at the DOS, identifying non-U.S. individuals who are direct or indirect beneficial owners of the LLC that is a reporting company. U.S. persons, including citizens of Puerto Rico or U.S. territories, do not now have to be identified, nor do any minor children, nominees, intermediaries, custodians, agents, employees, inheritors or creditors. Unless excluded, any other individual who owns, directly or indirectly, at least 25% of ownership interests of the reporting company or substantially controls the reporting company must be identified. Because all of these terms are broadly defined in the relevant regulations and commentaries (unfortunately in a somewhat confusing way), and therefore, before determining whether an individual falls into one of the categories, the definitions should be consulted. In addition, the individual who directly files or is primarily responsible for filing the predicate document with the DOS (an “applicant”) must be identified.

Once the pool of beneficial owners and applicant are identified, the following information must be filed for each of them:

- full legal name;

- date of birth;

- current home or business street address; and

- unique identifying information (but not an image) from an unexpired passport, driver’s license or other qualifying ID.

The CTA provides a shortcut: an individual can provide this information once and obtain a “FinCEN ID” that can subsequently be used for CTA disclosure filings. The LLC TA does not have such provision.

Information filed is exempt from disclosure under the Freedom of Information Law and is non-public, but on terms less protective than under the CTA. A beneficial owner may request or consent to disclosure, and the DOS may also release information pursuant to a court order, or to officers or employees of a federal, state or local government agency where the disclosure is necessary for the agency to perform its official duties as required by law or necessary to operate a program required by law. Information may also be disclosed by the DOS for a valid law enforcement purpose. Whether information that has been disclosed is confidential is not discussed.

There are substantial fines and penalties, civil and criminal, for breaches of the LLC TA, description of which is beyond the scope of this summary.

According to the FAQs, anyone a reporting company authorizes to act on its behalf, such as an employee, owner or third-party service provider, may file a beneficial ownership information report on the reporting company’s behalf. When submitting the report, the filer is instructed to be prepared to provide basic contact information about it, her or himself, including its, her or his name and email address. The person filing the report, including a third-party service provider, must certify on behalf of the reporting company that the information is true, correct and complete. It is unclear whether there are “third-party service providers” that will be willing to accept this obligation.

This is unlikely to be the last iteration of the rules and regulations for the LLC TA. But the program is now—in a more modest form than originally planned—in play.