By: Sreelatha Babu and Shanelle Whyte
Background
On December 19, 2025, New York Governor Kathy Hochul vetoed Senate Bill S8432/A8662. This legislation would have expanded the New York LLC Transparency Act (the “Act”) by creating New York-specific definitions of “reporting company” and related terms, independent of the federal Corporate Transparency Act (“CTA”). As a result of the veto, the Act remains tied to the federal CTA framework, as modified by FinCEN’s March 2025 interim final rule, and its scope is substantially narrowed.
The Act was originally enacted to address concerns that anonymous LLC ownership structures were being used to facilitate illicit activity, including real estate money laundering, tax evasion, and other financial crimes, and to align New York with federal and international beneficial ownership transparency standards. The law seeks to enhance accountability while preserving legitimate business uses of LLCs.
The Act went into effect on January 1, 2026, and establishes state-level beneficial ownership information (“BOI”) disclosure requirements for limited liability companies formed in or authorized to do business in New York. Currently, reporting obligations are limited primarily to foreign (non-U.S.) LLCs authorized to do business in New York.
Reporting Requirements and Attestations of Exemption
Under the Act as currently constituted, many limited liability companies will be required to report beneficial ownership information to the New York Department of State (“NYDOS”) or file an attestation of exemption confirming why they are not subject to reporting obligations.
Each covered “Reporting Company” must file a beneficial ownership disclosure with NYDOS identifying each “Beneficial Owner” and each “Applicant,” as defined under the Act. For each such individual, the disclosure must include:
- Full legal name;
- Date of birth;
- Current home or business street address; and
- A unique identifying number from one of the following unexpired documents:
- A passport;
- A state driver’s license; or
- An identification card or document issued by a state or local government agency or tribal authority for identification purposes.
Even exempt entities must file an annual attestation confirming their exemption status.
Who Must File and When
Under the present law:
- Foreign LLCs formed under the laws of a country other than the United States that are authorized to do business in New York will be required to file beneficial ownership disclosures.
- U.S. domestic LLCs remain outside the Act’s scope as currently structured unless New York later amends the law or adopts state-specific definitions.
- Existing covered LLCs authorized before January 1, 2026, generally must file initial BOI disclosures or attestations of exemption by December 31, 2026, subject to implementation guidance.
- Foreign LLCs formed or authorized on or after January 1, 2026, must file within 30 days after formation or registration.
- Covered entities must also file annual updates or reaffirm exemptions, as required.
- The federal definitions adopted by the CTA and its implementing regulations will continue to anchor the Act’s operation.
Recommendations
Considering the current legislation, the Governor’s veto of the proposed expansion, and ongoing regulatory developments, foreign LLCs authorized to do business in New York, as well as other LLCs that may be affected by future legislative or regulatory changes, should consider taking the following steps:
- Begin ownership mapping early. Covered foreign LLCs should begin identifying beneficial owners and individuals exercising substantial control. This process can be time-consuming, particularly for entities with layered or complex ownership structures.
- Review governance and control provisions. Beneficial ownership is not limited to equity ownership. Covered entities should review operating agreements and management structures to identify individuals who may exercise substantial control even without a significant ownership interest.
- Plan for ongoing compliance. Because the Act requires annual updates or reaffirmations of exemption status, LLCs subject to the Act should implement internal compliance calendars or systems to avoid missed filings.
- Monitor developments closely. The scope and implementation of the Act may continue to evolve. Although the Governor vetoed legislation that would have expanded the Act’s reach, future legislative action or regulatory guidance could modify reporting obligations, including for U.S. domestic LLCs.
- Consider structuring and operational implications. Businesses, particularly multinational groups, may wish to evaluate whether entity structure or governance changes are appropriate in light of disclosure obligations, privacy considerations, and operational needs.
Practical Impact on LLCs
The New York LLC Transparency Act introduces new state-level beneficial ownership disclosure obligations that will affect a narrower group of entities than originally anticipated. Foreign LLCs doing business in New York will need to assess ownership and control structures, determine exemption eligibility, and implement processes for initial and ongoing annual filings. U.S.-formed LLCs currently are not subject to filing obligations under the Act due to the veto and the federal anchoring definitions incorporated by reference.
Compliance and Next Steps
Business owners and compliance professionals should continue to monitor developments, including additional guidance from NYDOS and potential legislative action, and begin preparing to identify beneficial owners and determine exemption eligibility well in advance of the initial filing deadlines.
LLCs are encouraged to contact the trusted Chugh, LLP team to assess potential obligations under the Act and to prepare for compliance well in advance of the 2026 filing deadlines.
