Governor Hochul Sticks a Pin in New York State’s LLC Reporting Law
As we recently reported,[1] New York State’s LLC Transparency Act (“Act”) ,[2] which would have required limited liability companies formed or registered to do business in New York to disclose certain specified information about their beneficial owners to the New York Department of State,[3] is set to take effect on January 1, 2026. As we discussed, the impact of the Act was thrown up in the air when the federal Corporate Transparency Act (“CTA”),[4] which was the basis for the Act, was effectively revised — through an interim final rule adopted by FinCEN on March 26, 2025[5] — to require reporting of beneficial ownership information (“BOI”) only by foreign companies. Because the definitions of “reporting company” and “exempt company” in the Act are tied to the CTA, the reporting of BOI to the New York Department of State was similarly limited to only foreign companies after the federal law was revised.
The New York Legislature tried to revive the Act through the passage of Senate Bill S8432, which decoupled the definitions of “reporting company” and “exempt company” from the CTA and thus would have again required state reporting of BOI for limited liability companies formed or registered to do business in New York. At the time we published our prior article, S8432 had not been signed into law and awaited further action when the Legislature reconvened on January 7, 2026, six days after the Act is to take effect, thus creating much uncertainty.
But New York Governor Kathy Hochul put an end to this confusion (for the most part) on December 19, 2025, when she vetoed S8432. With the veto, it is relatively clear that only foreign companies (i.e., companies formed outside of U.S. jurisdictions) registered to do business in New York have to file their BOI with the New York Department of State.
As we noted, there remains one small issue, however. FinCEN removed domestic companies from the definition of what is a “reporting company” through the last exemption enumerated in the CTA, which is for a regulatory exemption by the Treasury Department, of which FinCEN is an arm.[6] In so doing, FinCEN also effectively made it so that a domestic limited liability company also does not qualify as a “reporting company” for purposes of the New York Act. The issue is that the Act currently defines an “exempt company” to mean a limited liability company “not otherwise defined as a reporting company that meets a condition for exemption enumerated in 31 U.S.C. § 5336(a)(11)(B).”[7] Applying this plain language, as required when interpreting a statute,[8] it is relatively straightforward to say that a company formed or registered to do business in New York is “not otherwise defined as a reporting company” under FinCEN’s interim final rule but “meets a condition for exemption enumerated in 31 U.S.C. § 5336(a)(11)(B).” Therefore, beginning on January 1, newly formed or registered limited liability companies technically should be required to file an attestation of exemption within 30 days of formation or registration in New York, and all previously formed or registered companies should have to file an attestation of exemption by January 1, 2027.[9]
This is clearly not at all what the New York Legislature had in mind when it passed the Act, so some additional cleanup of the statute should happen at some point. In the meantime, it seems very unlikely that the many thousands of companies that fit into this category will be filing attestations of exemption beginning on January 1 (or that the Department of State would want them to do so).
[1] eMinutes, New York Emerges as Epicenter of Corporate Transparency (Oct. 31, 2025).
[2] The Act is codified at N.Y. L.L.C. Law §§ 1106, 1107, and 1108. The provisions of the Act, including the information that must be disclosed and the penalties for not doing so, were discussed in one of our prior articles. See eMinutes, New York State Revises Its BOI Reporting Law. Thank You New York! (Apr. 8, 2024).
[3] See N.Y. L.L.C. Law § 1107.
[4] The CTA is codified at 31 U.S.C. § 5336.
[5] See FinCEN, Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension, 90 Fed. Reg. 13,688 (Mar. 26, 2025). FinCEN is the Financial Crimes Enforcement Network of the U.S. Department of the Treasury. FinCEN is the federal regulator charged with enforcing the CTA’s reporting requirements.
[6] See 31 U.S.C. § 5336(a)(11)(B)(xxiv) (the term “reporting company” does not include “any entity or class of entities that the Secretary of the Treasury, with the written concurrence of the Attorney General and the Secretary of Homeland Security, has, by regulation, determined should be exempt from the [CTA’s reporting] requirements”).
[7] See N.Y. L.L.C. Law § 1106(c).
[8] See, e.g., Majewski v. Broadalbin-Perth Cent. Sch. Dist., 91 N.Y.2d 577, 583, 673 N.Y.S.2d 966, 968, 696 N.E.2d 978, 980 (1998).