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On December 19, 2025, New York Governor Kathy Hochul vetoed a bill that would have amended the New York LLC Transparency Act ("New York Act") to include beneficial ownership information ("BOI") reporting requirements for all non-U.S. and U.S. limited liability companies ("LLCs") registered to do business in New York State ("New York").
The Governor's veto means that the New York Act willonly require disclosure of BOI only for non-U.S. LLCs registered to do in business in New York that do not otherwise qualify for any of the exemptions in the New York Act, and only with respect to non-U.S. beneficial owners.
Background:
As discussed in our previous alert, the New York legislature passed Senate Bill 8432 ("Proposed Amendment") on June 17, 2025, following the Financial Crimes Enforcement Network's ("FinCEN") interim final rule ("Interim Final Rule") that amended the agency's previous definitions of "reporting company" under the Corporate Transparency Act ("CTA") to exclude U.S. entities (i.e., entities formed in a U.S. state or territory, including Puerto Rico) from BOI disclosure requirements.
Accordingly, because the New York Act tracked the definitions of "reporting company," "exempt company," and "beneficial owner" under the CTA and related FinCEN regulations, the Interim Final Rule had the effect of limiting the New York Act requirement to file BOI disclosures to non-U.S. LLCs registered to do business in New York (that do not otherwise qualify for an exemption to the reporting requirements).
The Proposed Amendment was an attempt to negate the impact of the Interim Final Rule by decoupling FinCEN's definitions of "reporting company," "beneficial owner," and "exempt company" from those in the New York Act, and realigning them with the previous version of FinCEN's BOI reporting rules, so as to require BOI disclosures from both domestic and foreign entities.
Government Hochul's Veto of the Proposed Amendment
On December 19, 2025, New York Governor Kathy Hochul vetoed the Proposed Amendment, explaining in the veto message that "imposing additional requirements" to "create a mandate for businesses in New York that is not required under federal law," is "not in the interest of New York State."
Barring any additional amendments to the New York Act that the Governor might sign into law, or a decision by the New York legislature to override the Governor's veto—both of which appear unlikely—the New York Act continues to parallel the disclosure framework established by FinCEN's Interim Final Rule (i.e., BOI disclosure only required by certain non-U.S. LLCs for non-U.S. person beneficial owners).
Shortly after, the New York Department of State ("Department") posted a set of frequently asked questions ("FAQs") providing additional guidance on the New York Act. Notably, the FAQ confirms that, consistent with the Interim Final Rule, the New York Act likewise will not require reporting companies to include BOI for beneficial owners that are U.S. persons, including citizens of Puerto Rico or other U.S. territories.
Which LLCs Are Required to File?
The New York Act requires all non-U.S. LLCs registered to do business in New York ("Foreign Reporting Companies") to either (1) file BOI disclosure or (2) file attestations of exemption with the Department by the compliance deadlines. Practically speaking, this means that all Foreign Reporting Companies that do not meet any of the enumerated exemptions to reporting in the Interim Final Rule are required to file BOI disclosures, while Foreign Reporting Companies that qualify for one of the 23 exemptions to reporting are required to file an attestation stating their bases for exemption with the Department.
Which Foreign Entities Qualify as an LLC? To date, the Department has not provided any guidance clearly defining which non-U.S. entities qualify as LLCs for purposes of the New York Act. Foreign entities that resemble an LLC, but are not labeled as such under foreign law, e.g., because the jurisdiction does not have the equivalent "LLC" entity-type definition, will have to determine whether they qualify as "LLCs" or another type of foreign entity. This exercise may involve analyzing the entity's internal governance and legal structure, or confirming whether the entity is registered with the state of New York under New York's LLC statute. Crowell is well-situated to assist.
What is the Deadline to File Both BOI Disclosures and Attestations of Exemption?
| Registration Date | Initial Filing Deadline |
|---|---|
| Prior to January 1, 2026 | December 31, 2026 |
| On or after January 1, 2026 | Within 30-days of registration |
In addition, all Foreign Reporting Companies are required to file an annual statement in the form and manner prescribed by the Department, either confirming or updating their prior BOI disclosures or Attestations of Exemption, respectively.
Who Qualifies as a Beneficial Owner?
A beneficial owner is any non-U.S. person who: (1) owns or controls at least 25% of the ownership interests of the Foreign Reporting Company; or (2) exercises "substantial control" over the Foreign Reporting Company.
Who Qualifies as a Company Applicant?
A "company applicant" is the individual who: (1) directly files the document that creates or registers the Foreign Reporting Company; or (2) if different from the individual who directly files the document, is primarily responsible for directing or controlling the filing of the relevant document that creates or registers the Foreign Reporting Company. All Foreign Reporting Companies are required to submit company applicant information for both U.S. and non-U.S. person company applicants.
Penalties for Non-Compliance:
Foreign Reporting Companies failing to file BOI disclosures, attestations of exemption, or annual statements within 30 days of a deadline are marked as past due. Those failing to file within two years or more of a deadline will be marked as delinquent. Penalties may include monetary penalties of up to $500 for each day of noncompliance, as well as an additional fine of $250 for the initial failure to file. In more serious cases, penalties can include public disclosure of noncompliance, loss of good standing in New York, ineligibility for the pass-through entity tax ("PTET") deduction, and suspension, cancellation, or dissolution of the LLC.
Privacy Considerations:
All personal or identifying information submitted to the Department under the New York Act will be maintained in a secure database and deemed confidential. It will only be accessible: (1) pursuant to written requests of or by voluntary written consent of the beneficial owners; (2) by court order; or (3) where authorized, by the Department because it is needed for the official duties of federal, state, or local government agencies required by law, or for a valid law enforcement purpose. BOI reports are exempt from disclosure under the Freedom of Information Law.
Next Steps:
Foreign Reporting Companies registered to do business in New York as of December 31, 2025, will have until December 31, 2026, to comply with their disclosure obligations under the New York Act, but may wish to start taking steps to determine whether they are exempt from reporting under the New York Act, and identifying beneficial ownership and company applicant information. This exercise will largely mirror the compliance process for foreign LLCs that have already prepared or will have taken steps to comply with FinCEN's CTA's BOI reporting requirements. Foreign Reporting Companies registered to do business in New York on or after January 1, 2026, will have to move quickly to meet the 30-day window to file BOI disclosures or submit attestations of exemption.
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.
