After a rollercoaster of activity related to the federal Corporate Transparency Act (CTA), the U.S. Treasury Department (Treasury) announced Mar. 2, 2025, that it will not enforce any penalties or fines associated with beneficial ownership information reporting for U.S. reporting companies. (“Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies,” https://tinyurl.com/5bvp4mt7). In response, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule that revised the definition of “reporting company” to include only foreign entities (see 31 C.F.R. section 1010.380(c)(1), effective Mar. 26, 2025). For those limited liability companies (LLC) formed or authorized to do business in New York, however, the New York LLC Transparency Act (NY LLC Act) is still forthcoming and will require reporting similar in certain respects to what would have been required for such companies under the CTA.

On Mar. 1, 2024, New York Gov. Hochul signed into law New York Senate Bill 8059, thereby amending the NY LLC Act originally passed on Dec. 23, 2023, (New York Senate Bill 8059, signed by Gov. Hochul subject to chapter amendment).[1] The NY LLC Act requires LLCs formed or authorized to do business in New York to report their beneficial owners and company applicants to the New York Department of State. The following is a summary of some key provisions of the NY LLC Act and the significant effect produced as a result of the changes in certain federal CTA definitions to which the NY LLC Act is anchored:

Definitions. Many key terms under the NY LLC Act are defined by reference to the definitions under the CTA, such as “beneficial owner” (31 U.S.C. section 5336(a)(3)), “reporting company” (31 U.S.C. section 5336(a)(11)), “exempt company” (31 U.S.C. section 5336(a)(11)(B)), and “applicant” (31 U.S.C. section 5336(a)(2)). However, under the NY LLC Act, a reporting company refers only to LLCs formed or authorized to do business in New York.

As noted above, FinCEN issued an interim final rule revising the definition of “reporting company” to include only entities that were formed under the laws of a foreign country. If the NY LLC Act is not also amended to undo the effect of the revisions issued by FinCEN, the NY LLC Act would appear to only apply to foreign (i.e., non-US) formed LLCs that are authorized to do business in New York and would not apply to LLCs formed in New York or any other U.S. state. Accordingly, the NY LLC Act will likely also need revisions, at least to its definition provisions.

Initial Beneficial Ownership Disclosure. As noted, each reporting company is required to file a beneficial ownership disclosure with the New York Department of State. The disclosure must identify each beneficial owner and each applicant with respect to the reporting company.  The information required to be disclosed includes:

• Full legal name
• Date of birth
• Current home or business street address
• A unique identifying number from an acceptable identification document, such as:

1. An unexpired passport
   
2. An unexpired state driver’s license
   
3. An unexpired identification card or document issued by a state or local government agency

All beneficial ownership disclosures shall be submitted electronically as prescribed by the New York Department of State. As of the date of this article; however, there is no program on the New York Department of State’s website for the submission of the beneficial ownership disclosures. The NY LLC Act explicitly allows for such disclosures to be signed electronically.

Exempt Companies. An LLC formed or authorized to do business in New York will be exempt from filing the beneficial ownership disclosure if it meets one of the 23 exemptions (or 24, considering the interim final rule under the CTA) enumerated under the CTA (31 U.S.C. section 5336(a)(11)(B)), such as securities reporting issuers, banks, credit unions, securities brokers or dealers, venture capital fund advisers, accounting firms, tax-exempt entities, and large operating companies. Each exempt company is required to electronically file an attestation indicating the specific exemption claimed and the facts supporting the exemption. In addition, the attesting company must file an annual statement affirming its exempt status, as further described below.

Date of Initial Reporting with the New York Department of State 

Companies Formed Prior to Jan. 1, 2026. Each reporting company formed or authorized to do business in New York before the “effective date” of Jan. 1, 2026, of the NY LLC Act must file its beneficial ownership disclosure with the New York Department of State no later than Jan. 1, 2027. Each exempt company formed or authorized to do business before the effective date of the NY LLC Act must file its attestation of exemption with the New York Department of State no later than Jan. 1, 2027.

Companies Formed on or After Jan. 1, 2026. Each reporting company formed or authorized to do business in New York after the effective date must file the beneficial ownership disclosure no later than 30 days after the initial filing of articles of organization or application for authority to do business in New York. Similarly, each exempt company formed or authorized to do business in New York after the effective date must file the attestation of exemption no later than 30 days after the initial filing of articles of organization or application for authority to do business in New York.

Annual Reporting. After the initial beneficial ownership disclosure or attestation, each company must file an annual electronic statement confirming or updating the following:

1. Beneficial ownership disclosure information
   
   
2. The street address of its principal executive office
   
   
3. Its exempt status, if applicable
   
   
4. Any other information designated by the New York Department of State

Failure to File. If a reporting company fails to file the beneficial ownership disclosure, attestation of exemption, or annual statement for more than 30 days, it will be shown as past due in the Department of State records. If the failure to file continues for two years, the company will be marked as delinquent. The NY LLC Act authorizes the attorney general to assess a fine of up to $500 per day of noncompliance. In addition, the attorney general can bring an action to suspend, cancel, or dissolve any delinquent company.

With the CTA’s definition of “reporting company” revised to eliminate domestic U.S. entities, the fate of the NY LLC Act should be closely monitored. As noted, the NY LLC Act incorporates definitions from the CTA. In light of the FinCEN  interim final rule, the New York Legislature may choose to amend the NY LLC Act to counteract its effect on domestic (i.e., non-foreign) LLCs.