New York Moves to Clarify LLC Transparency Act Ahead of 2026 Implementation

Key Takeaway

New York’s amendments provide helpful clarity but stop short of resolving all conflicts with the evolving federal framework. With less than 15 months until implementation, businesses should proactively assess ownership structures and prepare to meet both state and federal transparency obligations.

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The New York Legislature has passed amendments to the New York Limited Liability Company Transparency Act (NY LLCTA), seeking to resolve key questions before the law’s January 1, 2026, effective date. The amendments, contained in Senate Bill S8432 (substituting Assembly Bill A8662A), were introduced following federal changes to the Corporate Transparency Act (CTA) and aim to clarify how New York’s disclosure requirements will operate. While S8432 passed both chambers and is expected to be signed by the governor, it does not resolve all open issues, leaving uncertainty for businesses and practitioners as the compliance deadline approaches.

The NY LLCTA, enacted in 2024, was modeled on the federal CTA and references many of its definitions and exemptions. In March 2025, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued an Interim Final Rule (IFR) that significantly revised the CTA’s scope—prompting New York lawmakers to act before their own law takes effect. Because the NY LLCTA directly incorporates federal language by reference, FinCEN’s narrowing of the federal “reporting company” definition created ambiguity over whether New York domestic LLCs remain subject to disclosure.

Key Changes in Senate Bill S8432

The new bill provides more explicit definitions and refocuses the NY LLCTA on LLCs formed or authorized to do business in New York, aligning more closely with the CTA’s original Final Reporting Rule rather than its 2025 IFR revision.

A “reporting company” means a limited liability company that is:

• • • • • Created by filing a document with the New York Department of State; or
        • Authorized to do business in New York as a foreign LLC under Article VIII of the New York Limited Liability Company Law.

The bill incorporates 23 categories of exemptions largely mirroring the CTA, including:

• • • • • Publicly traded companies
        • Banks, credit unions, and registered broker-dealers
        • Venture capital fund advisers
        • Accounting firms
        • Tax-exempt nonprofits
        • “Large operating companies” (20+ full-time employees, >$5 million in revenue, and a physical office in New York)
        • Inactive entities meeting strict inactivity criteria

“Beneficial Owner” is defined as any individual who either:

• • • • • Exercises substantial control over the LLC, or
        • Owns or controls 25% or more of the LLC’s ownership interests.

However, there are still some unresolved terms:

• • • • • The legislation does not define “Applicant,” “Substantial Control,” or “Ownership Interest,” leaving those terms to the federal CTA definitions under 31 U.S.C. §5336(a).
        • This gap may cause confusion until further guidance or regulations are issued.

Compliance Requirements and Deadlines

 

LLC Formation Date	Initial Filing Deadline
Formed before January 1, 2026	File beneficial ownership disclosure or exemption attestation by January 1, 2027
Formed on or after January 1, 2026	File beneficial ownership disclosure or exemption attestation within 30 days of formation or registration

Annual Filings

• • • • • LLCs must file an annual statement confirming or updating beneficial ownership information and principal office address.
        • Exempt entities must file an annual attestation affirming their exemption.
        • The filings require 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.

Enforcement and Penalties

• • • • • 30+ days past due: Entity marked “Past Due” on public records.
        • 2+ years past due: Entity marked “Delinquent.”
        • Penalties:
          • Up to $500 per day in fines.
          • Potential suspension, cancellation, or dissolution by the Attorney General.

Despite these amendments, several compliance gaps remain:

• • • • • There is no FinCEN ID equivalent under the NY LLCTA, meaning individuals must disclose personal identifying information.
        • Existing LLCs must report historical applicant information, even if the LLC was formed years ago.
        • The New York Department of State has not yet drafted implementing regulations or finalized the electronic filing system, making procedural details unclear.

Additionally, while the IFR temporarily narrows federal CTA reporting, it could face legal challenge or reversal by a future administration. Businesses should prepare for the possibility that full beneficial ownership reporting could be reinstated at the federal level, which may affect how New York interprets its own statute.

What Companies Should Do Now

• • • • • Monitor legislative developments and final guidance from the New York Department of State.
        • Inventory all New York LLCs and LLCs authorized to do business in New York within your organization.
        • Identify beneficial owners and formation applicants early to streamline future filings.
        • Assess privacy risks related to personal information disclosure.
        • Coordinate CTA and NY LLCTA compliance to avoid duplicative or inconsistent reporting.

For more information regarding the CTA or how the new developments around the CTA may impact your business, please contact your local Dykema relationship attorney.