- within Wealth Management, International Law and Law Practice Management topic(s)
On March 1, 2024, New York Governor Kathy Hochul signed the LLC Transparency Act (the Act) into law. The Act will take effect starting on January 1, 2026, and will require all limited liability companies formed or qualified to do business in New York to file a beneficial ownership disclosure or attestation of exemption with the New York Department of State (NY DOS).
Which entities need to disclose beneficial ownership information to NY DOS?
The Act is modeled after the federal Corporate Transparency Act (CTA), and the definition of “reporting company” under the Act is the same as that under the CTA. However, the Act also limits the definition of “reporting company” to a limited liability company (a) formed in New York state or (b) formed in another jurisdiction and authorized to do business in New York state. Unlike the CTA, New York's Act does not apply to corporations or other legal entities.
The Act also exempts the same categories of entities from the definition of “reporting company” as the CTA, such as any limited liability company that (i) employs more than 20 employees on a full-time basis in the U.S., (ii) filed in the previous year federal income tax returns in the U.S. demonstrating more than $5 million in gross receipts of sales, and (iii) has an operating presence at a physical office in the U.S. The full list of exemptions can be found under 31 U.S.C. § 5336(a)(11)(B).
Who counts as a beneficial owner?
The definition of “beneficial owner” under the Act is also the same as that under the CTA, namely, any entity or individual who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise (a) exercises substantial control over the entity, or (b) owns or controls at least 25% of the ownership interests of the entity. It is thus important to note that an individual may own the equity of a limited liability company indirectly and still qualify as a beneficial owner under the Act.
What needs to be disclosed?
A reporting company will be required to disclose its beneficial ownership information, identifying each beneficial owner and providing such beneficial owner's: (1) full legal name; (2) date of birth; (3) current home or business street address; and (4) a unique identifying number from an acceptable identification document as defined in the CTA (such as a driver's license or passport).
What obligations do exempt entities have?
Exempt entities will be required to file an attestation of exemption with NY DOS setting forth the specific exemption under 31 U.S.C. § 5336(a)(11)(B) that excludes the entity from reporting obligations under the Act and the facts on which such exemption is based.
Who can access the disclosed information?
All information relating to beneficial owners who are natural persons that is collected by NY DOS will be maintained in a secure database and deemed confidential, except as follows: (a) pursuant to the written request or by voluntary written consent of the beneficial owner; (b) by court order; (c) to officers or employees of another federal, state or local government agency where disclosure is necessary for the agency to perform its official duties as required by statute or necessary to operate a program specifically authorized by law; or (d) for a valid law enforcement purpose including as relevant to any law enforcement investigation by the office of the attorney general.
When do I need to make filings with NY DOS?
Limited liability companies formed or authorized to do business in New York before January 1, 2026, must file their beneficial ownership information report with NY DOS by December 31, 2026.
Limited liability companies formed or authorized to do business in New York after January 1, 2026, will have 30 days to file their beneficial ownership information report with NY DOS after filing of the articles of organization or filing of an application for authority to do business in New York.
Entities claiming an exemption to reporting obligations under the Act are subject to the same deadlines, as set forth above.
Do I have any ongoing obligations after filing?
Yes, both reporting companies and exempt entities will be required to update or confirm beneficial ownership information, or continue to claim any applicable exemptions to reporting obligations, on an annual basis.
Further Developments
In June 2025, the New York State Senate and the New York State Assembly passed S. 8432, which removes the Act's references to the CTA, given its uncertain and evolving status. S. 8432 instead seeks to define “reporting company,” “beneficial owner” and the relevant exemptions directly within the Act, without reference to the CTA. However, the New York State Legislature has since recessed, and the bill is not yet active. The next session is scheduled to begin in January 2026.
Businesses subject to the Act should be prepared to make beneficial ownership filings by the applicable current deadline.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
