Alerts

New York LLC Transparency Act Update

As compliance professionals prepare for upcoming regulatory changes, the New York LLC Transparency Act (the “Act” or “NYLTA”) has been an area of particular focus. With an effective date of January 1, 2026, the Act introduces new ownership disclosure requirements for certain limited liability companies authorized to do business in New York. However, guidance from the New York Department of State has clarified that the scope of the law is significantly narrower than many originally anticipated.

Under the New York Department of State’s current interpretation, only entities formed under the laws of a foreign country — not other U.S. states — and authorized to do business in New York as an LLC will be subject to the Act’s reporting requirements. LLCs formed in New York or formed in other U.S. states/territories (and registered in New York) are exempt from reporting at this time.

While early discussions suggested a sweeping new filing obligation, the current guidance confirms that most U.S.-based LLCs will not be required to take action under the Act as it is presently structured.

FinCEN Interim Final Rule Narrowed the Scope of the New York LLC Transparency Act

The limited application of the NYLTA is tied to how the Act incorporates definitions from the federal Corporate Transparency Act (CTA). In March 2025, the Financial Crimes Enforcement Network (“FinCEN”) issued an interim final rule that narrowed the federal definition of a “reporting company.” Because New York’s law relies on those same definitions, the state’s reporting obligations were effectively narrowed as well.

New York Senate Bill 8432 redefined key terms (including “reporting company”) and attempted to decouple the NYLTA from the federal CTA. The bill was passed by both houses, but Governor Hochul vetoed it on December 19, 2025. As a result, it remains that only entities formed under the laws of a foreign country and authorized to transact business in New York as an LLC fall within the current scope of the Act.

Understanding the Filing Obligations for Covered LLCs

Beginning January 1, 2026, non-exempt foreign entities authorized to do business in New York as an LLC will be required to submit ownership-related filings to the Department of State. These include:

An initial disclosure statement identifying individuals who own or control the LLC, and
Annual disclosure statements filed thereafter.

The reporting requirements are set forth in New York Limited Liability Company Law Sections 1106 through 1108 and are intended to increase transparency around entity ownership and control.

Foreign-Country LLC Exemptions and Attestations

Some foreign LLCs may qualify as “exempt companies” under 31 U.S.C. § 5336(a)(11)(B) of the federal Corporate Transparency Act, such as certain large operating companies. However, even exempt entities are not entirely relieved of the NYLTA’s filing obligations. Instead of submitting a full disclosure report, exempt foreign LLCs must file an Attestation of Exemption with the New York Department of State confirming their exempt status.

This distinction is especially important for paralegals and compliance teams tracking entity obligations across multiple jurisdictions, as a filing requirement still exists even when ownership disclosure is not required.

Deadlines to Monitor

Although New York has not yet launched its submission portal, the Initial Beneficial Ownership Disclosure Report and Initial Attestation of Exemption from Beneficial Owner Disclosure forms have been released. Foreign entities authorized to do business in New York as an LLC before January 1, 2026, must complete their initial filing by January 1, 2027. Entities qualified on or after January 1, 2026, will be required to file within 30 days of authorization. Annual filings will follow thereafter.

Plan Ahead for Future Amendments

While legislative efforts to expand the Act to cover domestic LLCs have not passed to date, future amendments remain possible. For firms and companies managing large entity portfolios, ongoing monitoring will be essential.

For now, the key takeaway is clear: most U.S.-formed LLCs have no reporting obligation under the New York LLC Transparency Act, but non-U.S. entities registered as LLCs in New York should begin preparing for compliance well in advance of the 2026 effective date.

If you have any questions, please get in touch with us at info@capitolservices.com.

New for 2026: Annual Report Management in Canada & Puerto Rico

For years, you have trusted us with your annual report filings across the nation. Today, we are excited to announce the expansion of our Annual Report Management Services (ARMS). Beginning in January 2026, registrations in Canada and Puerto Rico will be eligible for ARMS enrollment!

Canadian coverage includes annual filings in all provinces, encompassing both provincial and extra-provincial registrations, as well as filings with Corporations Canada. In Puerto Rico, we support annual filing requirements for domestic and foreign corporations (profit, nonprofit, and professional), LLCs, and PLLCs.

Managing annual compliance is essential to maintaining good standing and avoiding costly penalties. This expansion will enable you to centralize filings across even more jurisdictions, simplifying your compliance process. Let us take one more item off your 2026 to-do list.

Enrollment is easy. Email us at filingmanager@capitolservices.com and let us know you’d like to enroll!

Texas: The New Delaware for Businesses?

Delaware’s dominance as the home of U.S. corporate formations has long rested on its specialized Court of Chancery, predictable case law, and business-friendly regulatory environment—attracting more than half of all publicly traded U.S. companies. But momentum is shifting. As America’s economic center moves south and west, and with a perceived shift in Delaware’s case decisions, Texas is emerging as a strong contender for the nation’s premier business domicile.

Modern Corporate Legal Infrastructure

Although Delaware’s Court of Chancery remains the gold standard, Texas has been rapidly expanding its own corporate legal infrastructure. Texas Business Courts, launched in 2024, mirror Delaware’s model but add streamlined procedures for complex disputes. Staffed by judges with deep business law expertise, these courts promise faster resolutions and clearer standards—critical for corporations that value certainty in governance and litigation.

Flexible Corporate Statutes

Recent amendments to the Texas Business Organizations Code (including SB 29 and SB 1057) codify the business judgment rule, allow jury trial waivers, and tighten derivative litigation standards. These updates aim to reduce frivolous suits and enhance governance flexibility, allowing companies to innovate while maintaining legal clarity. The modernized statutes create an attractive balance of customization and predictability.

Tax Advantages That Matter

While Delaware is renowned for its corporate-friendly tax laws, Texas offers a dual advantage: no corporate income tax and no personal income tax. This structure lowers operating costs and boosts take-home pay for employees and owners—directly impacting profitability and workforce satisfaction. Combined with Texas’s growing economic influence, this advantage is hard to ignore.

A New Corporate Power Center

Delaware’s legacy remains strong, but Texas’s momentum is unmistakable. Texas has also established the Texas Stock Exchange (TXSE), designed to offer a more issuer-friendly, efficient, and pro-business alternative to NYSE and Nasdaq. And all of these efforts are drawing support from big business, law firms and investment groups like BlackRock, Citadel, Schwab, and Texas’ own Perot Investments. With its expanding business-court system, flexible corporate statutes, supportive regulatory environment, and meaningful tax advantages, Texas is rapidly becoming not just a place to operate, but a strategic place to incorporate. For many businesses, the Lone Star State may soon outshine the First State.

Whether Delaware or Texas, Capitol Services is Uniquely Positioned

With legal reforms, judicial infrastructure, and economic momentum, Texas is positioning itself as a strategic hub for incorporation. While Delaware’s legacy remains strong, the Lone Star State is rewriting the rules. For many businesses, Texas may soon rival—or even surpass—the First State as the preferred domicile. As a Texas-founded and headquartered corporate legal services company with a strong presence in Delaware, Capitol Services is uniquely positioned to support law firms and businesses as Texas rises to challenge Delaware’s dominance. Our experienced corporate service team is ready to guide clients through formations, mergers, and compliance in both states. From registered agent services to complex filings, we deliver expertise, speed, and reliability nationwide.

If your clients are weighing Texas or Delaware, make Capitol Services your first call. Explore our services.

Lessons from International Best Practices in Registries

Corporate filings may seem like routine paperwork, but for law firms and in-house counsel they underpin compliance, governance, and deal execution. Around the world, business registries are modernizing in ways that affect how lawyers advise clients. Several international best practices are especially relevant for U.S. practitioners.

The Digital Shift

Globally, registries are moving wholly online. In New Zealand, company incorporations and annual returns are processed almost instantly, with intuitive public search tools. Estonia embeds digital ID into filings, allowing directors to approve changes remotely.

The takeaway: clients expect filings to be fast and accessible. Firms relying on slower, paper-heavy processes risk being left behind.

Beneficial Ownership Transparency

The U.S. Corporate Transparency Act has put beneficial ownership disclosure in the spotlight, but the trend is global. The UK’s Persons of Significant Control Register and EU debates over public access highlight a clear direction: greater scrutiny of company ownership. Coupled with this is the increasing requirement for identity verification of corporation officers and intermediaries.

US Corporate transparency requirements have shifted significantly in the past twelve months. Although the CTA currently is not being actively enforced against U.S. companies, a number of U.S. states are already moving ahead with their own corporate transparency laws. For example, New York has legislated its own disclosure-regime for beneficial ownership, and other states, including California and possibly Illinois, are speculating on similar regimes. While the federal future of the CTA remains uncertain, these state-led initiatives suggest that the momentum toward greater corporate ownership disclosure continues unabated.

Counsel should prepare clients for expanding obligations and ensure ownership structures are ready for future disclosure regimes.

Automation and Straight-Through Incorporation

Some jurisdictions are cutting red tape with automation. Singapore enables near-instant company formation through automated name and ID checks. Denmark integrates tax and company filings in a single streamlined process.

This speeds transactions but reduces room for error. For law firms, it means more emphasis on getting filings right the first time.

Registry Interoperability

As businesses expand globally, seamless access to accurate company information is becoming essential. Some jurisdictions are leading the way with interoperable registry systems. The European Business Register, for example, connects multiple national databases, enabling standardized company data to flow across borders.

For law firms and in-house counsel, interoperability means faster due diligence, fewer inconsistencies, and a clearer view of corporate structures. Without it, practitioners are left reconciling fragmented filings from different jurisdictions. As more regions pursue harmonized systems, counsel should anticipate growing client expectations for unified, reliable registry data, no matter where the company is incorporated.

What This Means for U.S. Counsel

Faster filings, greater transparency, and cross-border interoperability are reshaping expectations. Even if U.S. registries evolve more slowly, clients exposed to global practices will expect the same efficiency and foresight. Partnering with trusted providers such as Capitol Services ensures filings remain compliant and timely. Organizations like Capitol Services remove the worry for counsel by acting as trusted intermediaries with state and international registries. They stay on top of processes, rules, and compliance requirements, so attorneys and in-house teams can focus on advising clients with confidence, rather than navigating administrative complexity and the ever evolving modernization of these registries.

Conclusion

Registries may seem like background infrastructure, but they are becoming central to compliance and governance. By watching best practices abroad, U.S. counsel can anticipate change and position themselves as trusted navigators in a more digital, transparent, and interconnected corporate world.

About the Author

Justin Hygate has been at the forefront of business registry development for more than two decades, shaping modern approaches to corporate governance and cross-border registration systems. Since 2000, he has regularly engaged with U.S. registries, building long-standing relationships and sharing international perspectives to strengthen registry practice.

He served as Chair of the International Relations Section of the International Association of Commercial Administrators (IACA), where he led global engagement and collaboration between jurisdictions. In addition, Justin contributes his expertise through other international organizations focused on registry innovation, interoperability, and regulatory alignment.

Recognised for his leadership in driving forward global dialogue on business registries, Justin continues to champion initiatives that improve access, consistency, and cooperation across borders. In 2025, he was honoured with the Corporate Registers Forum (CRF) Lifetime Achievement Award for his outstanding contributions to the global registry community.

New York Moves to Clarify LLC Transparency Act

The New York State Legislature passed amendments to the New York LLC Transparency Act (the “Act”) ahead of pending effective date of January 1, 2026. These amendments aim to clarify key definitions and requirements following changes to the federal Corporate Transparency Act (the “CTA”), which the New York law heavily references. However, the amendments have not yet been sent to the governor, and they don’t fill in all of the gaps.

The original New York Act, modeled closely after the federal CTA, incorporated many of the CTA’s definitions and exemptions by direct reference. However, in March 2025, the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) released an Interim Final Rule that significantly altered the CTA, prompting the need for New York to reestablish clarity and intent within its own legislation.

To that end, New York Assembly Bill 8662 was introduced in late May 2025 and later substituted by Senate Bill 8432 (S8432). While the bill has passed both houses and is expected to be signed by the governor, it does not address all outstanding questions regarding the law and its implementation.

The legislation introduces clearer, more explicit definitions of core terms, aligning closely with the CTA’s initial Final Reporting Rule rather than its more recent amendments. For example, the bill explicitly provides definitions of key terms such as:

Beneficial Owner: Any individual who either:

- Exercises substantial control over an LLC, or
- Owns or controls 25% or more of the LLCs ownership interests.

Reporting Company: Any domestic or foreign LLC that does not meet one of the 23 listed exemptions.
Exemptions (largely mirroring those under the CTA) include but are not limited to:

- Publicly traded companies
- Banks and credit unions
- Registered broker-dealers
- Venture capital fund advisers
- Accounting firms
- Tax-exempt nonprofits
- Large operating companies
- Inactive entities, subject to the following criteria:

- - In existence for over one year
  - Not engaged in active business
  - Not owned by a foreign person
  - No changes in ownership or asset transfers over $1,000 in the past 12 months
  - No assets or ownership in any other LLC

Notably, the bill does not define “Applicant”, continuing to refer to the definition provided under 31 U.S.C. § 5336(a)(2). This omission has been brought to the attention of legislators, and revisions may still be made.

Additionally, neither “substantial control” nor “ownership interest” have been defined.

Compliance Challenges and Practical Concerns

A few operational gaps remain unaddressed:

No FinCEN ID equivalent: Unlike the federal system, the New York Act does not provide a substitute ID mechanism. As a result, individual beneficial owners and company applicants may be required to provide personal identifying information, creating privacy concerns.
Existing entities must report applicant information: This includes data on those involved in the LLC formation or registration no matter how long ago.

Implementation Timeline and Filing Requirements

The New York Department of State is currently developing the electronic filing system needed to support the Act. However, the state has not started drafting administrative rules and has indicated no urgency in doing so. As a result, many important compliance questions remain unanswered.

Filing Deadlines:

Existing LLCs (formed before January 1, 2026): Must file a beneficial ownership disclosure or exemption attestation by January 1, 2027.
New LLCs (formed on or after January 1, 2026): Must file within 30 days of formation or registration.

Required Information for Beneficial Ownership Disclosure:

Full legal name
Date of birth
Current home or business street address
Unique ID number from an unexpired:

- Passport
- State-issued driver’s license
- Other government-issued ID

Annual Requirements:

Once their initial disclosure is filed, all LLCs must file an annual statement confirming or updating:

- Beneficial ownership information
- Principal executive office address
- Other details as required by the Department of State

Exempt LLCs must file an annual attestation detailing the exemption and supporting facts.

Penalties for Non-Compliance

Failure to file the required information or exemption attestation will trigger enforcement actions:

30+ days past due: Status marked as “Past Due” on public records
2+ years past due: Status marked as “Delinquent” on public records
Penalties:

- Up to $500 per day in fines
- Possible suspension, cancellation, or dissolution by the New York Attorney General

Final Thoughts

While S8432 attempts to establish clarity in light of recent federal developments, significant open questions remain. The absence of administrative rules and lack of a privacy-friendly reporting mechanism pose challenges for companies and professionals alike.

As the implementation date approaches, stakeholders should monitor legislative developments closely, begin assessing compliance strategies, and prepare for a wave of reporting and disclosure obligations in 2026.

Corporate Entity Manager (CEM): Now Live on Your Client Dashboard

We’re thrilled to introduce our updated Corporate Entity Manager (CEM) — an intuitive and easy-to-use platform designed to help you simplify and streamline how you manage your business entities. Available now through your Capitol Services Client Dashboard, CEM gives you a centralized place to organize and maintain all your important corporate information securely and efficiently.

What You Can Expect from Our Corporate Entity Manager

With CEM, you can easily store and manage all your essential corporate details in one place — including company names, company types, charter numbers, formation dates, tax IDs, management information, and ownership details. That means your records are always accurate, up-to-date, and easy to access whenever you need them.

Seamless Registered Agent Integration

As a client using Capitol Services as your registered agent, CEM integrates seamlessly with your registered agent data. This lets you easily track service of process and official notices alongside your entity records.

Annual Report Management Made Simple

We’ve included an Annual Report Calendar to help you keep track of filing deadlines. If enrolled in our Annual Report Management Service (ARMS), you will have direct access to your filed annual reports and the company information that you have provided to us using ARMS Verify will prepopulate in CEM. This integration creates efficiency and means that you only have to update a company’s management information once in the event that it changes.

Keep Key People Organized with the Contact Library

To help you manage your entities even more efficiently, we’ve included a built-in Contact Library. This feature lets you store and organize contact information and link contacts directly to specific companies, ensuring that every name, title, email, or phone number is at your fingertips. No more hunting through spreadsheets or email threads — just fast, reliable access to the information you need, right where you need it.

Customizable and Easy to Use

Our platform lets you create custom fields to fit your unique business needs, and our powerful search and export tools make finding and analyzing your data quick and straightforward.

Generate company profiles that allow you to share key details about a company efficiently
Search service of process, notices, and filed annual reports
Export search results to spreadsheets
Create a list of all your companies
View a complete guide of annual report due date for all companies on your account

Easy Access and Support

The Corporate Entity Manager is available now — and it’s included at no extra charge for clients with Capitol Services as their registered agent. Simply log in to the Client Dashboard with your existing credentials to get started. Need help? A comprehensive CEM User Guide is available to guide you through the platform’s features.

If you have questions or need assistance, the CEM support team is ready to help at 800-345-4647 or cem@capitolservices.com.

What’s Next? CEM Pro Coming in 2026

We’re not stopping here! We’re already hard at work developing CEM Pro, an enhanced version of the Corporate Entity Manager that will launch in 2026. CEM Pro will bring exciting new features like:

Management of companies not represented by Capitol Services
Document storage
Compliance calendaring with notifications and reminders
Invoice review and payment
Sophisticated user permissions
Enhanced reporting tools

If you want to stay ahead of the curve, join our CEM Pro waitlist for early updates and demos.

Join Us on This Journey

With the launch of our enhanced Corporate Entity Manager, we’re proud to offer you a modern, efficient solution that saves you time and gives you greater control over your corporate information.