The landscape for New York limited liability companies has changed in 2026 and non-U.S. LLC owners must comply with new regulations.
The New York Limited Liability Company Transparency Act took effect Jan. 1. All non-U.S. LLCs existing or registered to do business in New York before Jan. 1, 2026, must file beneficial ownership information or an attestation of exemption with the New York Department of State prior to Jan. 1, 2027. Non-U.S. LLCs formed or registered to do business after January 1, 2026, have 30 days from the date of formation or registration to comply with the requirements. These reports must be filed annually.
The new law, which aims to identify the individuals behind “shell” LLCs and hold them accountable for criminal activity and other misconduct, is a much slimmer version of the original bill passed in 2023. It endured a rocky road when the federal government redefined several terms in its Corporate Transparency Act and exempted businesses formed in the United States, thus directly affecting New York’s law.
Here are five things LLC owners need to know:
What is the History of New York’s LLC Transparency Act?
The law was designed to end anonymous ownership of New York LLCs by defining beneficial ownership, identifying the beneficial owners upon company formation or registration, and making the information available to law enforcement and certain other designated parties.
The original bill was modeled after the federal Corporate Transparency Act, which required reporting beneficial owner information to the U.S. Department of Treasury’s Financial Crimes Enforcement Network. New York wanted its own version to ensure law enforcement in the state would have access to the information. But the CTA has undergone a transformation under the Trump administration, the most relevant being the definition of a “reporting company” changing to exclude companies formed within any U.S. state or territory. Because New York’s law uses CTA’s definition of a reporting company, LLCs formed in the United States no longer are subject to the law.
New York legislators did try to amend the LLC Transparency Act to remove its association with the federal law, but Governor Kathy Hochul vetoed the attempt, saying imposing requirements that exceeded the federal government’s was not “in the interest of New York State.”
Who is Required to Report and What Must be Reported?
New York’s law requires foreign LLCS to report beneficial owner information, including full legal name, date of birth, current home or business address and a unique identifying number from a passport, driver’s license or other identification care/document issued by a state or local government agency (or tribal authority).
Beneficial owners include the applicant who directly files the registration document and any individual who exercises “substantial control” over, or owns 25 percent or more, of a reporting company. Substantial control is considered someone who is a managing partner or senior officer, someone who has authority to appoint or remove other members, someone who makes important company decisions, or someone who meets other “substantial criteria.”
There are five exceptions:
- minor children (report parent or guardian’s information instead)
- an individual acting on behalf of a beneficial owner as the beneficial owner’s nominee, intermediary, custodian or agent
- someone whose only interest in the reporting company is a future interest through a right of inheritance
- someone who is a creditor of the reporting company
- a person who is an employee of the reporting company, meaning they are subject to the will and control of the employer, only profit from the company through their employment status and they are not a senior officer of the company.
Importantly, while a non-U.S. company may be required to report, it is not required to report information regarding beneficial owners who are United States citizens or a designated U.S. resident under Internal Revenue Service code.
The beneficial ownership information is confidential. It will be maintained in a secure, nonpublic database accessible to federal, state or local government employees when the disclosure is necessary for the government to perform its official duties. The state also may release the information for law enforcement purposes and under court order. The information is not accessible under the Freedom of Information Law.
How do I File and are There Filing Fees?
There is a required, nonrefundable, $25 filing fee and a credit card authorization form. Due to the confidential nature of the filings, the filings should not be submitted by mail or fax. The Department of State has established a secure filing system and applicants can submit information by email to dosCorpBOI@dos.ny.gov.
What are the Penalties for Not Reporting?
The penalties start with the LLC being marked “past due” on the Department of State’s public database of registered businesses. The LLC will have two years to report the required information or be marked “delinquent.” Initial penalties are $250 for failure to file or filing late, with the possibility of $500 daily fines and dissolution of the LLC.
Once the LLC receives notice from the Department of State that it is past due, if the LLC fails to submit a filing within 30 days of that notice, its status will be changed to “suspended.”
According to the Department of State, “suspended entities are prohibited from conducting business in New York until such time as the required Beneficial Ownership Statement or Attestation of Exemption Statement has been filed, and filing fees, payment of a $250 fine to the NYDOS and verification that any fines assessed by the New York State AG have been satisfied.”
Also, knowingly providing or attempting to provide false or fraudulent beneficial ownership information may result in civil penalties and criminal prosecution.
What Else Should I Know About New York’s LLC Transparency Act?
The Department of State has published a Beneficial Owner Disclosure page with information on how to report, forms for filing or seeking an exemption, a list of Frequently Asked Questions and much more information.
It is encouraged that non-US limited liability companies authorized to do business in New York review the webpage and guidance to ensure compliance with the LLC Transparency Act’s requirements. If you need help or would like to consult with attorneys about the new law and its requirements, Harris Beach Murtha’s Corporate Practice Group can assist. Please reach out to attorney David M. Clar at (585) 419-8712 and dclar@harrisbeachmurtha.com; attorney Zana M. Beck at (518) 701-2774 and zbeck@harrisbeachmurtha.com; or to the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York State in Albany, Binghamton, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains; as well as in Boston, Massachusetts, and Newark, New Jersey.
