By Daniel B. Axman, Trusts & Estates Partner
Beginning January 1, 2026, New York will require many limited liability companies to disclose their beneficial ownership information under the newly enacted New York LLC Transparency Act (NYLTA).
The Federal government had imposed similar entity reporting requirements with much broader application. However, in March 2025, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an interim final rule significantly narrowing the scope of entities required to submit a beneficial ownership information (BOI) report under the federal Corporate Transparency Act (CTA), originally enacted in 2020. Entities formed under state law, such as LLCs and corporations, are no longer required to submit a BOI Report to FinCEN. The revised rule now applies only to entities formed under foreign law that register to do business in the U.S. (formerly known as “foreign reporting companies”).
(See: Golenbock Legal Alert: FinCEN Issues Interim Final Rule: U.S. Companies Exempt from BOI Reporting, Foreign Entities Still Required to File)
In general, the NYLTA applies to all LLCs formed under New York law as well as foreign LLCs registered to do business in the state. If an LLC qualifies for an exemption, no BOI report is required to be filed, although the LLC must still file an attestation of exemption with the NY Department of State. LLCs may qualify for one of 23 exemptions (which mirrors the CTA) – those exemptions can be found here. In practice, this means that virtually every LLC doing business in New York will need to engage with the new reporting system in some form.
For LLCs formed before January 1, 2026, the deadline to file an initial beneficial ownership report is January 1, 2027. LLCs existing on or after January 1, 2026, must file within 30 days of formation or registration. Once filed, reports must be updated annually to confirm or amend ownership information.
The reporting obligation focuses on identifying “beneficial owners.” A beneficial owner includes any individual who directly or indirectly exercises substantial control over an LLC, or who owns or controls at least 25% of its ownership interests. Importantly, the reports will be housed in a secure state database and will not be accessible to the public. That said, the law carries meaningful penalties for failure to comply – non-compliant LLCs may be placed in delinquent status, suspended, or even dissolved, and the New York Attorney General may impose fines of up to $500 per day for late filings.
Despite the looming January 1, 2026, implementation date, significant uncertainty persists around the NYLTA.
- In June of 2025, the New York legislature passed Senate Bill 8432 to address definitional gaps and harmonize state law with recent federal changes, but Governor Kathy Hochul has yet to sign the bill. Until that happens, we cannot say with certainty what the statute will require on day one. Absent Governor Hochul signing S.8432, the NYLTA relies to a significant degree on the CTA. Until the Governor signs S.8432 into law, it is not unreasonable to conclude that all domestic LLCs are exempt from the NYLTA reporting due to the CTA interim final rule’s reporting exemption for all domestic entities.
- Even if the Governor signs S.8432 into law, the amended NYLTA would still rely on the CTA for the definitions of the terms “Applicant,” “Substantial Control,” and “Ownership Interest”. As set forth above, that reliance remains problematic because of the CTA interim final rule’s reporting exemption, making it unclear how those definitions will apply in a purely state context.
- Compounding the uncertainty, the New York Department of State (NY DOS), which is responsible for implementing the NYLTA, has yet to create a filing portal or publish guidance, such as informational pamphlets. Reports could be due as early as January 2026, yet we have no information regarding filing mechanics.
Notwithstanding the existing uncertainty, the deadlines remain unchanged. For business owners, the passage of the NYLTA represents more than a simple administrative formality. Companies should begin reviewing ownership structures now to determine whether they are subject to the law or can claim an exemption. Even exempt entities must be prepared to make an attestation. Moreover, persons forming new LLCs in the coming years should weigh whether New York remains the most advantageous jurisdiction given these new requirements. Although beneficial ownership information will not be made public, companies should anticipate questions and concerns from stakeholders about what data is collected and how it will be safeguarded. Transparent internal communication and coordination with counsel will be important in managing those issues. Our team will stay on top of the passage of S.8432 and the release of guidance from the NY DOS and issue updates accordingly.
Contacts:
| Daniel B. Axman daxman@golenbock.com (212) 907-7379 | Barry A. Cassell bcassell@golenbock.com (212) 907-7337 |
| Steven G. Chill schill@golenbock.com (212) 907-7350 | Elizabeth Man-Wai Li eli@golenbock.com (212) 907-7357 |
Golenbock Eiseman Assor Bell & Peskoe LLP uses Client Alerts to inform clients and other interested parties of noteworthy issues, decisions and legislation which may affect them or their businesses. A Client Alert should not be construed or relied upon as legal advice. This Client Alert may be considered advertising under applicable state laws.
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