Background: Why New York Passed Its Own Disclosure Law

In 2023, concerned that the federal Corporate Transparency Act (CTA) might not give state law enforcement sufficient access to beneficial ownership information, the New York Legislature enacted its own version — the New York LLC Transparency Act (NY LLCTA).

The law has already been amended once, and a second amendment is pending. Because of these changes and the absence of regulatory guidance, its final form remains uncertain. Still, LLC owners and their attorneys in New York should prepare now for its expected implementation on January 1, 2026.

How the Federal CTA Shaped New York’s Approach

The CTA, enacted in 2020, required over 30 million U.S. businesses to file Beneficial Ownership Information (BOI) Reports with the Financial Crimes Enforcement Network (FinCEN). These reports identify the individuals who either:

  • Own 25% or more of the company, or

  • Exercise “substantial control” over it.

Each report must include personal details for every beneficial owner — including name, address, date of birth, and an image of an ID such as a driver’s license or passport.

However, due to strong industry pushback and litigation, FinCEN issued an Interim Final Rule (effective March 26, 2025) that exempted U.S. persons from filing BOI information. This dramatically reduced the number of affected companies — from 30 million to fewer than 100,000 — leaving many state officials frustrated and prompting New York’s response.

The New York LLC Transparency Act Explained

In 2024, New York introduced the NY LLCTA, initially mirroring the federal CTA’s structure and definitions. When the federal rule was scaled back, the state legislature passed Senate Bill 8432 (June 2025) to fix inconsistencies and clarify its scope.

Here’s what the amended act currently includes:

  • Who Must Report: Any LLC formed in New York or authorized to do business in the state.

  • Exemptions: Twenty-three categories of entities, such as publicly traded companies, banks, registered investment advisers, accounting firms, nonprofits, and large operating companies with more than 20 full-time employees, over $5 million in revenue, and a physical office in New York.

  • Definition of Beneficial Owner: Anyone who owns more than 25% of the company or exercises substantial control — using the same standard as the federal CTA.

 

Uncertainty and Compliance Challenges Ahead

Although the law’s effective date remains January 1, 2026, the New York Governor has not yet acted on Senate Bill 8432. This delay creates uncertainty over what version of the law will actually take effect.

Even if the bill is signed, the NY LLCTA still references federal definitions — like “substantial control” — that no longer have a clear meaning after the federal exemptions. Adding to the confusion, the New York Department of State has yet to release rules, forms, or an online portal for filing reports.

Filing Deadlines and Requirements

Unless further changes occur, the current law requires:

  • Initial Reports

    • For LLCs formed or registered on or after January 1, 2026 → due within 30 days.

    • For LLCs formed or registered before January 1, 2026 → due by January 1, 2027.

  • Exempt Companies must also file an exemption attestation by the same deadlines.

  • Annual Filings will be required to either confirm or amend prior information — a stricter approach than the federal CTA, which only requires updates when information changes.

For each beneficial owner, LLCs must report:

  • Full legal name

  • Date of birth

  • Residential or business street address

  • A unique identifying number from a government-issued ID (passport, driver’s license, etc.)

 

Penalties for Non-Compliance

LLCs that fail to file on time will be marked “past due.” After two years, their status changes to “delinquent.” The New York Attorney General may impose fines up to $500 per day and even pursue suspension, cancellation, or dissolution of the company.

Unlike the federal CTA, the NY LLCTA does not offer a “FinCEN ID” option, meaning beneficial owners will need to disclose personal information directly each time they file.

 

What Business Owners Should Do Now

Even amid uncertainty, New York LLCs should start preparing. Business owners and their counsel should:

  1. Monitor developments from the Governor and the Department of State.

  2. Inventory all LLCs formed or registered in New York and flag those likely required to report.

  3. Identify beneficial owners and company applicants for each entity.

  4. Establish an internal compliance policy and assign a compliance officer to gather and manage reporting data.

Bottom Line:

While New York’s LLC Transparency Act aims to enhance financial transparency, it currently raises as many questions as it answers. With the implementation date quickly approaching, early preparation is the best way to stay compliant — whatever version of the law ultimately takes effect.