In brief
The New York LLC Transparency Act ("Act") became effective as of January 1, 2026. Although there was previously uncertainty regarding the definition of a "reporting company" under the Act, on December 31, 2025, the New York Department of State (NYDOS) confirmed that the Act is only applicable to limited liability companies (LLCs) formed outside the US that are authorized to do business in New York State. With this confirmation, the Act now requires non-US LLCs that were authorized to do business in New York State prior to January 1, 2026, to file either a beneficial ownership disclosure or, if applicable, an attestation of exemption by December 31, 2026. Non-US LLCs formed and authorized to do business on or after January 1, 2026, are now required to file an initial beneficial ownership disclosure statement or attestation of exemption within 30 days of filing their application for authority to do business in New York State to the NYDOS.
In more detail
Prior to the issuance of clarifying guidance, there was significant uncertainty under the Act regarding what companies qualify as a "reporting company". Several key provisions of the Act rely on definitions tied to the federal Corporate Transparency Act (CTA), which was enacted in 2021. In particular, the definitions of "beneficial owner," "reporting company," "exempt company," and "applicant" adopted the terms in the CTA. For more detail on the definitions of these terms, please refer to our March 2024 client alert entitled “Corporate Transparency Act – Three Months In.”
When the Act was signed into law by New York Governor Hochul in 2023, the CTA's definition of a "reporting company" broadly included both US and foreign entities formed or registered through a filing with a secretary of state, subject to certain exemptions. However, on March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) narrowed the beneficial ownership information (BOI) reporting requirements under the CTA. Only entities classified as "foreign reporting companies" are required to comply with the BOI reporting requirements under the CTA. Further, "US persons" are exempt from being reported as beneficial owners of foreign reporting companies and from having to provide their BOI to such companies.
The changes made by FinCEN effectively limited the scope of the Act to only non-US LLCs. In an effort to realign the Act with the CTA's original broader definition of "reporting company," the New York Legislature passed amendments that would have extended the Act’s application to both US and non-US LLCs formed or authorized to do business in New York State. However, this was vetoed by Governor Hochul who clarified that the Act was not intended to impose compliance burdens on New York businesses that go beyond federal requirements. As a result of Governor Hochul's veto, it remained unclear whether the Act would apply to US LLCs formed outside of New York State in addition to non-US LLCs.
The NYDOS subsequently provided clarification on its Beneficial Owner Disclosure website, which was updated on December 31, 2025, to include beneficial ownership forms and frequently asked questions. The NYDOS guidance confirms that only LLCs formed outside the US that are authorized to do business in New York State are subject to the new beneficial ownership information disclosure requirements under the Act. Non-US LLCs that are authorized to do business in New York State are required to either (i) file an initial and annual beneficial ownership disclosure (as a reporting company), or (ii) file initial and annual attestation of exemption (as an exempt company) with the Department of State. A foreign LLC will be considered as an "exempt company" if it meets a condition for exemption under the CTA (Section 5336(a)(11)(B) of the US Code). There are currently 23 such exemptions, including but not limited to banking organizations, governmental authorities, registered broker-dealers, insurance companies, and registered accounting firms. An attestation of exemption must specify the particular exemption being claimed.
The NYDOS guidance expressly confirms that New York LLCs and LLCs formed in another state or US territory and authorized to do business in New York State, are exempt from reporting requirements under the Act.
To determine the applicability of the Act, it must be determined whether a foreign entity is an LLC. There is currently no definition of "foreign LLC" under the Act nor did NYDOS provide any guidance on this matter. However, Section 102(k) of the New York Limited Liability Company Act ("LLC Act") defines "foreign LLC" as an unincorporated organization formed under the laws of any jurisdiction, including any foreign country, other than the laws of New York State (i) that is not authorized to do business in New York State under any other of its laws and (ii) of which some or all of the persons who are entitled (A) to receive a distribution of the assets thereof upon the dissolution of the organization or otherwise or (B) to exercise voting rights with respect to an interest in the organization have, or are entitled or authorized to have, under the laws of such other jurisdiction, limited liability for the contractual obligations or other liabilities of the organization. For the purposes of the Act, with respect to the existing foreign LLCs registered to do business in New York State, a logical reading of the definition of "foreign LLC" under the LLC Act would be to exclude the phrase "(i) that is not authorized to do business in New York State under any other of its laws". Nevertheless, such determination may remain difficult if foreign law does not identify the entity as an LLC.
The Act is effective as of January 1, 2026. Non-US entities that are registered or registering to do business in New York State are well advised to determine whether they meet the definition of a foreign LLC for purposes of the Act, and, if so, to review their activities in New York and discuss with their counsel whether they may be restructured.
Kelly Chan, Associate, has contributed to this legal update.