Now that Governor Hochul vetoed the Legislature’s proposed amendments to the NY LLC Transparency Act, members and managers of non-exempt LLCs remain unsure if filings will be necessary beginning January 1, 2026.   The current law, which was originally passed in 2023, seeks to require in-state LLCs, as well as out-of-state LLCs registered to do business in New York, to file either a beneficial ownership report or an attestation of exemption. The purpose of the reporting is to provide the Secretary of State with the identity of beneficial owners of an LLC – information that is ordinarily not provided when creating such an entity. 

The crux of the confusion lies with the  United States Treasury Department’s recission of the Corporate Transparency Act reporting requirement for domestic entities.  The Treasury Department issued a Rule recently that redefines a "reporting company” to mean only an entity formed in a foreign country. That is, domestic entities formed in the United States are no longer obligated to file a beneficial ownership report with FinCEN. Why does this matter for the NY Law?  The text of New York’s current LLC Transparency Act directly references and relies upon the Fed’s definition of a "reporting company” when defining which LLCs must file a beneficial ownership report.  Now that the Federal reporting requirement for domestic entities is a nullity, it may be that the New York LLC Transparency Act, as written, no longer requires a filing by an otherwise non-exempt LLC.

The State Legislature seemingly recognized the issue and passed Bill S.8432/A.8662, which, if signed by Governor Hochul, would have codified the State’s definitions of a “reporting company,” thereby ensuring that the beneficial owners of all non-exempt NY LLCs must file a report.  It remains to be seen if the Legislature will override the veto. 

A reasonable reading of the NY LLC Transparency Act, in conjunction with the Governor’s veto and FinCEN’s changes to its Rule, leaves non-exempt LLCs guessing if a report is now necessary.  It is worth noting that the Department of State, to which the New York reports would be filed, has yet to establish a form, reporting tool, or any guidance about filing; the law has been on the books nearly two years.

Like FinCEN’s previous exemption, the vetoed Bill exempts domestic LLCs that employ more than twenty employees on a full-time basis in the United States, demonstrate more than $5 million in gross receipts, and have an operating presence at a physical office within the state. Just as with the LLC reporting form, the means by which to file an attestation of exemption remains unclear.