On December 19, 2025, New York Governor Kathy Hochul vetoed legislation that would have restored the original, broader scope of the New York Limited Liability Company Transparency Act (the “NY LLCTA”). As a result, the NY LLCTA will apply only to non-US limited liability companies authorized to do business in New York, when it takes effect on January 1, 2026.
Background and Legislative Context
The NY LLCTA largely tracks (with some exceptions described in previous client alerts that we issued on the subject) the federal Corporate Transparency Act (the “CTA”) and requires “reporting companies” to disclose beneficial ownership information. The NY LLCTA incorporates many of the CTA’s definitions, including the definition of “reporting company,” but further limits that definition to include only “limited liability companies formed or authorized to do business in New York state.”
At the time the NY LLCTA was enacted, the CTA defined “reporting company” broadly to include both US and foreign entities formed or registered through a filing with a secretary of state, subject to certain exemptions. However, as we noted in a client alert at the time, on March 26, 2025, the Financial Crimes Enforcement Network (“FinCEN”) issued an interim final rule (the “IFR”) revising the CTA’s definition to apply only to entities formed under the laws of a country other than the United States and expressly exempting US-formed entities.
Because the NY LLCTA incorporates the CTA’s definition of “reporting company,” FinCEN’s revised definition flowed through to the NY LLCTA, limiting its scope to non-US limited liability companies. In response, the New York Legislature passed amendments intended to realign the NY LLCTA with the CTA’s original, broader definition (the “Proposed Amendments”) which would have applied the NY LLCTA to both US and foreign limited liability companies that are formed or authorized to do business in New York. On December 4, 2025, we issued a client alert noting that the Proposed Amendments had not yet been signed into law by Governor Hochul.
Governor Hochul’s Veto
In vetoing the Proposed Amendments, Governor Hochul explained that the NY LLCTA was intended to mirror federal reporting requirements under the CTA, not to impose additional compliance burdens on New York businesses.
As a result of Governor Hochul’s veto, the NY LLCTA remains aligned with the CTA as revised by the IFR and will apply only to limited liability companies formed under the laws of a country other than the US that are authorized to do business in New York.
Remaining Ambiguities
Although the scope of the NY LLCTA has now been significantly narrowed, several important questions remain:
- What constitutes a “limited liability company”?
The NY LLCTA does not clearly define which non-US entities qualify as “limited liability companies” for purposes of the statute. The NY LLCTA is codified within the New York Limited Liability Company Law (the “NY LLCL”), which generally defines a limited liability company as an entity formed under NY LLCL—“unless the context otherwise requires.” Here, the context plainly requires a broader interpretation.
- Must US beneficial owners be reported?
Aside from narrowing the definition of “reporting company,” the IFR created an exemption from reporting information under the CTA about US persons, even if beneficial owners of foreign entities that are reporting companies. While the NY LLCTA borrows the CTA’s definition of “beneficial owner,” the IFR exemption for reporting US beneficial owners is accomplished not by modifying the definition of “beneficial owner” itself, but rather by creating a separate exemption from the CTA’s reporting requirements. Because the NY LLCTA establishes its own, independent reporting regime, it is unclear whether the exemption for reporting US beneficial owners carries over to the NY LLCTA.
- Under the NY LLCTA, are US limited liability companies required to make “Exempt Company” filings?
Unlike the CTA, the NY LLCTA requires “exempt companies” that are formed or authorized to do business in New York to file an attestation, under penalty of perjury, identifying the specific exemption relied upon and facts supporting that exemption. Because of the way “exempt company” is defined under the NY LLCTA, it is not clear whether US limited liability companies that are formed or authorized to do business in New York need to make such “exempt company” filings under the NY LLCTA.
- Will there be regulatory guidance?
The Proposed Amendments would have authorized the New York Department of State to issue rules and regulations clarifying the definitions under the NY LLCTA. With the veto of the Proposed Amendments, it is unclear what authority, if any, the Department of State has to provide interpretive guidance.
Next Steps
As the January 1, 2026 effective date of the NY LLCTA approaches, any limited liability company (or non-US entity that is uncertain whether it qualifies as a limited liability company) formed or authorized to do business in New York should consult with counsel to assess whether it may be subject to the NY LLCTA and, if so, how to comply in the absence of regulatory clarity.
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