Corporate Transparency Act \u2013 Three Months In<\/a>.\u201d<\/p>\nWhen the Act was signed into law by New York Governor Hochul in 2023, the CTA\u2019s definition of a \u201creporting company\u201d broadly included both US and foreign entities formed or registered through a filing with a secretary of state, subject to certain exemptions. However, on March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) narrowed the beneficial ownership information (BOI) reporting requirements under the CTA. Only entities classified as \u201cforeign reporting companies\u201d are required to comply with the BOI reporting requirements under the CTA. Further, \u201cUS persons\u201d are exempt from being reported as beneficial owners of foreign reporting companies and from having to provide their BOI to such companies.<\/p>\n
The changes made by FinCEN effectively limited the scope of the Act to only non-US LLCs. In an effort to realign the Act with the CTA\u2019s original broader definition of \u201creporting company,\u201d the New York Legislature passed amendments that would have extended the Act\u2019s application to both US and non-US LLCs formed or authorized to do business in New York State. However, this was vetoed by Governor Hochul who clarified that the Act was not intended to impose compliance burdens on New York businesses that go beyond federal requirements. As a result of Governor Hochul\u2019s veto, it remained unclear whether the Act would apply to US LLCs formed outside of New York State in addition to non-US LLCs.<\/p>\n
The NYDOS subsequently provided clarification on its Beneficial Owner Disclosure website, which was updated on December 31, 2025, to include beneficial ownership forms and frequently asked questions. The NYDOS guidance confirms that only LLCs formed outside the US that are authorized to do business in New York State are subject to the new beneficial ownership information disclosure requirements under the Act. Non-US LLCs that are authorized to do business in New York State are required to either (i) file an initial and annual beneficial ownership disclosure (as a reporting company), or (ii) file initial and annual attestation of exemption (as an exempt company) with the Department of State. A foreign LLC will be considered as an \u201cexempt company\u201d if it meets a condition for exemption under the CTA (Section 5336(a)(11)(B) of the US Code). There are currently 23 such exemptions, including but not limited to banking organizations, governmental authorities, registered broker-dealers, insurance companies, and registered accounting firms. An attestation of exemption must specify the particular exemption being claimed.<\/p>\n
The NYDOS guidance expressly confirms that New York LLCs and LLCs formed in another state or US territory and authorized to do business in New York State, are exempt from reporting requirements under the Act.<\/p>\n
To determine the applicability of the Act, it must be determined whether a foreign entity is an LLC. There is currently no definition of \u201cforeign LLC\u201d under the Act nor did NYDOS provide any guidance on this matter. However, Section 102(k) of the New York Limited Liability Company Act (\u201cLLC Act<\/strong>\u201c) defines \u201cforeign LLC\u201d as an unincorporated organization formed under the laws of any jurisdiction, including any foreign country, other than the laws of New York State (i) that is not authorized to do business in New York State under any other of its laws and (ii) of which some or all of the persons who are entitled (A) to receive a distribution of the assets thereof upon the dissolution of the organization or otherwise or (B) to exercise voting rights with respect to an interest in the organization have, or are entitled or authorized to have, under the laws of such other jurisdiction, limited liability for the contractual obligations or other liabilities of the organization. For the purposes of the Act, with respect to the existing foreign LLCs registered to do business in New York State, a logical reading of the definition of \u201cforeign LLC\u201d under the LLC Act would be to exclude the phrase \u201c(i) that is not authorized to do business in New York State under any other of its laws\u201d. Nevertheless, such determination may remain difficult if foreign law does not identify the entity as an LLC.<\/p>\nThe Act is effective as of January 1, 2026. Non-US entities that are registered or registering to do business in New York State are well advised to determine whether they meet the definition of a foreign LLC for purposes of the Act, and, if so, to review their activities in New York and discuss with their counsel whether they may be restructured.<\/p>\n
Kelly Chan,\u00a0Associate,\u00a0has contributed to this legal update.<\/p>\n","protected":false},"excerpt":{"rendered":"In brief The New York LLC Transparency Act (\u201cAct\u201c) became effective as of January 1, 2026. Although there…\n","protected":false},"author":3,"featured_media":626179,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[5122],"tags":[5229,405,403,5226,5225,5228,5227,267556,67,586,132,5230,68,2969],"class_list":["post-626178","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-york","tag-america","tag-new-york","tag-new-york-city","tag-newyork","tag-newyorkcity","tag-ny","tag-nyc","tag-transparency-act","tag-united-states","tag-united-states-of-america","tag-unitedstates","tag-unitedstatesofamerica","tag-us","tag-usa"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116157945095036284","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/626178","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=626178"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/626178\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/626179"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=626178"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=626178"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=626178"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}