Update on the New York LLCTA: Pending Amendments and What Companies Should Know

The clock will soon start ticking for compliance with New York’s Limited Liability Company Transparency Act (the “NY LLCTA” or the “NY Act”), scheduled to take effect on January 1, 2026. Although not yet signed into law by the governor, the New York Legislature has passed amendments (the “Proposed Amendments”) intended to resolve key questions ahead of the NY Act’s effective date. The Proposed Amendments were introduced in response to recent federal changes to the Corporate Transparency Act (“CTA”), from which the NY LLCTA borrows many of its definitions, and seek to clarify how New York’s disclosure requirements will operate. Specifically, rather than adopting the CTA’s revisions, which limit reporting to foreign entities and non-US persons, the Proposed Amendments seek to negate those changes and realign the NY Act with the New York Legislature’s intent to require disclosures from both domestic and foreign entities and individuals. On the assumption that the Proposed Amendments will be signed by the governor, this communication discusses the current state of the NY LLCTA and the anticipated effects of the Proposed Amendments.

Disclosure and Timing Requirements, Exceptions, and Penalties

The NY LLCTA, enacted on December 22, 2023, applies only to non-exempt limited liability companies (each, a “Covered Entity”). This contrasts with the CTA, which covers all entity types. The scope of LLCs captured—domestic, foreign, or both—will ultimately depend on whether the Proposed Amendments are signed into law. The NY Act requires all Covered Entities to report information on their beneficial owners, adopting the CTA’s definition of beneficial owners as individuals who exercise “substantial control” or who own or control at least 25% of the entity’s “ownership interests.” However, this scope may vary depending on whether the Proposed Amendments are adopted. Information will also be required with respect to a covered entity's “Applicant” (defined by the CTA to include individuals who file, or direct or control the filing of, formation or registration documents). The NY LLCTA requires each Covered Entity to disclose the following information for its beneficial owners and applicants: (i) full legal name; (ii) date of birth; (iii) current address (which, unlike the CTA, may be a residence or a business address); and (iv) a unique identifying number from an unexpired passport, driver’s license, or other government-issued ID (but, unlike the CTA, this does not include a FinCEN ID number).

The NY LLCTA currently adopts by reference the CTA’s 23 reporting exemptions, as well as the CTA’s new exemption for domestic entities, effectively treating domestic LLCs as exempt under the NY Act. The Proposed Amendments, however, would eliminate this automatic incorporation while retaining the same 23 exemptions directly within the NY Act and excluding mere domestic status as a basis for exemption. Under the NY LLCTA, any entity that qualifies for an exemption (an “Exempt Entity”) must file an attestation, under penalty of perjury, identifying the specific exemption and supporting facts, in a form to be issued by the Department of State, which has not yet released such guidance.

The NY LLCTA requires all Covered Entities and Exempt Entities formed or registered in New York on or before January 1, 2026, to file, as applicable, an initial disclosure or attestation of exemption by January 1, 2027. Entities formed or registered in New York after January 1, 2026, must file the required disclosure or attestation within 30 days of submitting their articles of organization or application for authority to do business in the state. All Covered Entities must file an annual statement updating their beneficial ownership information, principal address, and exemption status, in the form and manner prescribed by the Department of State (which, as of this writing, has not yet been issued). Exempt Entities must submit an annual attestation of exemption under penalty of perjury.

The NY LLCTA imposes civil and criminal penalties for noncompliance. Any Covered Entity or Exempt Entity that fails to file its required disclosure, attestation of exemption, or annual statement for more than 30 days is marked as past due. If the entity does not cure the violation within 30 days of receiving notice from the Department of State, it is deemed suspended and barred from doing business in New York and is classified as delinquent if the failure continues for two years. The Attorney General may impose civil penalties of up to $500 per day for continued noncompliance once an entity is designated past due. A violation may be cured, and further penalties prevented, by submitting all overdue filings, paying a $250 cure fee, and satisfying any accrued penalties. The Attorney General may seek dissolution, cancellation, or revocation of authority for entities that remain delinquent or knowingly provide false information. The NY Act also provides a separate 90-day safe harbor that permits corrections of inaccurate or incomplete filings without penalty if the correction is made within 90 days of the original filing.

Current Interpretation of the NY LLCTA

The NY LLCTA currently incorporates certain defined terms of the CTA. Since the NY Act adopts those terms as amended, federal changes to the CTA’s definitions flow directly into the NY LLCTA. As a result of FinCEN’s amendment in early 2025 to the CTA’s definition of a “reporting company,” only foreign reporting companies, entities formed under the laws of a foreign country and registered to do business in the United States, are required to provide beneficial ownership disclosures under the NY Act. Likewise, under the CTA’s amended definition of a “beneficial owner,” the NY Act would only require reporting for non-US beneficial owners. Thus, with the CTA amendments incorporated, the NY LLCTA now effectively applies only to foreign entities and their non-US beneficial owners.

Impact of the Proposed Amendments

Considering these changes, the Proposed Amendments were adopted to preserve the NY LLCTA’s broader reach and to align with the New York Legislature’s intent. The Proposed Amendments explicitly define “reporting companies” and “beneficial owners” to maintain beneficial ownership reporting obligations for both domestic and foreign LLCs, as well as for US and foreign beneficial owners. They also codify the CTA’s 23 exemption categories directly in the NY Act, rather than incorporating them by reference, and create no separate exemption for domestic companies. Lastly, the bill adds a new subdivision authorizing the New York Department of State to promulgate rules and regulations to further clarify any definitions outlined in the NY LLCTA.

Uncertainty Over the New York Law and Next Steps for Affected Entities

There remains significant uncertainty over the NY LLCTA. As the NY Act’s January 1, 2026 effective date stands, the governor has yet to sign the Proposed Amendments, and the Department of State has issued no implementation guidance. Moreover, although the Proposed Amendments clarify some definitions, they still rely on CTA cross-references for others, leaving key terms like “substantial control,” “ownership interest,” and “applicants” undefined and likely requiring further clarification. While the bill awaits the governor’s signature, businesses should continue to monitor legislative developments and forthcoming Department of State guidance. In the meantime, companies should identify beneficial owners and formation applicants early to streamline future filings.