This is an update to our previous alerts:
Overview
The New York LLC Transparency Act (NYLTA), New York’s version of a beneficial-ownership disclosure law, remains scheduled to take effect on January 1, 2026. It will require both limited liability companies (LLCs) formed in New York and foreign LLCs authorized to do business in New York to disclose beneficial-ownership information or file an attestation of exemption with the New York State Department of State (NYSDOS).
However, the scope and mechanics of the law remain uncertain. The Governor has not yet signed Senate Bill S8432 (S8432), a June 2025 amendment intended to clarify definitions and decouple the statute from the federal Corporate Transparency Act (CTA). To add uncertainty, the NYSDOS has indicated that if S8432 is not signed into law, only LLCs formed under the laws of another country and registered to do business in New York would be subject to beneficial ownership disclosure, consistent with the current scope of the CTA. In addition, NYSDOS has not issued regulations or guidance or launched a public filing portal. As a result, compliance obligations remain unclear even as the implementation date approaches.
Federal Background: The CTA’s Saga
Congress enacted the CTA to combat money laundering and other illicit activities. The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) regulations initially required most U.S. legal entities to file beneficial-ownership information (BOI) reports identifying individuals who either (a) own or control at least 25% of the entity, or (b) exercise “substantial control.”
Following extensive litigation and political pressure, FinCEN issued an interim final rule effective March 26, 2025, exempting all domestic reporting companies and U.S. persons from BOI reporting under the CTA. The CTA’s reporting requirement now applies only to entities formed under foreign law that register to do business in the United States.
The NYLTA and S8432 Amendments
Mirroring aspects of the CTA, New York enacted its own disclosure regime in late 2023 with the introduction of the NYLTA, which initially incorporated by reference key CTA definitions.
After the federal interim final rule effectively removed U.S. entities from CTA coverage, the New York Legislature passed S8432 to preserve state-level disclosure obligations, remove ambiguity, and free the NYLTA of its dependency on the CTA.
This amendment has not yet been signed by the Governor. If signed, it will:
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Redefine “reporting company” to mean any LLC (a) formed by filing with the NYSDOS, or (b) authorized to do business in New York as a foreign LLC.
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Define exemptions, largely tracking the CTA’s exemptions, including public companies, banks, and “large operating companies” (more than 20 full-time U.S. employees, more than $5 million in revenue, and a physical office in New York).
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Re-adopt the 25% ownership test and “substantial control” test for identifying beneficial owners, mirroring the CTA’s framework.
It is important to note that even if S8432 is signed, critical definitions still refer to the federal CTA terminology, which may prove ambiguous given the CTA’s current exemption of domestic entities.
Reporting Obligations and Deadlines
Unless further amended:
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LLCs formed or authorized to do business in New York before January 1, 2026 must file their initial report or exemption attestation by January 1, 2027.
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LLCs formed or authorized to do business in New York on or after January 1, 2026 must file within 30 days of formation or qualification.
Reports must identify each beneficial owner and, if applicable, each company applicant, providing for each individual: full legal name, date of birth, residential or business street address, and a unique ID from a valid identification document.
Exempt LLCs must file an attestation of exemption, including factual support signed under penalty of perjury, by the same deadlines.
In addition to the initial filing, both reporting and exempt LLCs must file an annual statement either confirming or amending prior submissions.
Penalties for Non-Compliance
In case of failure to file within 30 days of a deadline, the status of the entity is marked as past due. In case of failure to file within two years or more of a deadline, the status of the entity is marked as delinquent. The Attorney General may also assess civil penalties up to $500 per day, impose a $250 initial fine, and seek suspension, cancellation, or dissolution of the LLC.
Recommended Next Steps
Considering the uncertainty surrounding the implementation of the NYLTA, the best way to proceed is to track the Governor’s decision on S8432 and any NYSDOS announcements.
Based on recent guidance by NYSDOS and in the absence of the Governor’s signature of S8432, beginning on January 1, 2026, only LLCs formed under the laws of a foreign country and qualifying to do business in New York would be required to comply with the NYLTA. However, in view of the current uncertainty, it is recommended that all other LLCs formed in New York or qualified to do business in New York should determine their classification as “reporting company” or “exempt company” and identify beneficial owners based on the current definitions, so they are prepared if S8432 is signed or the NYSDOS issues further guidance.
Cozen O’Connor will continue to monitor further developments relating to the NYLTA, S8432, and any NYSDOS implementation guidance, and is available to answer questions regarding these evolving requirements.