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:
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- 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:
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- 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:
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- 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
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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:
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- 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:
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- 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:
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- 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.