United States NY LLC 2026 Transparency Act Guide Overview

What is beneficial ownership reporting for US businesses?

Beneficial ownership reporting is a set of federal and state rules that require business entities to disclose who ultimately owns or controls them. At the US federal level, the Corporate Transparency Act (CTA) requires most smaller corporations and LLCs to report individual owners and controllers to FinCEN; New York will add a separate LLC-specific reporting layer starting January 1, 2026.

The core policy goal is to stop anonymous shell companies used for money laundering, sanctions evasion, and tax fraud. For legitimate businesses, this translates into new data collection, filing, and update workflows that must be built into entity management and onboarding processes.

• "Beneficial owner" generally means any individual who:
  • Owns or controls at least 25% of the ownership interests, or
  • Has substantial control over the company (such as senior officers or key decision-makers).
• Covered entities are usually:
  • Corporations, LLCs, and similar entities created by filing with a state office, and
  • Foreign entities registered to do business in a US state.
• Key obligations include:
  • Initial beneficial ownership report
  • Updates when ownership or control changes
  • Tracking and documenting exemptions where applicable

Which US businesses must report under the federal Corporate Transparency Act?

Under the CTA, most US corporations, LLCs, and similar entities that are not already heavily regulated must report their beneficial owners to FinCEN. Large operating companies, banks, registered investment advisers, insurance companies, and a list of other "already-regulated" entities are exempt, but they must meet very specific criteria.

This is primarily a B2B compliance requirement affecting small and mid-sized businesses, single purpose entities, private holding companies, and investment vehicles. If your entity was formed by filing with a secretary of state and is not clearly in a regulated industry, you should assume it is a "reporting company" until counsel confirms otherwise.

Basic CTA scope

• Covered "reporting companies" include:
  • Corporations (Inc., Corp.)
  • Limited liability companies (LLCs)
  • Other entities formed by filing with a state office (LPs, certain LLPs, business trusts in some states)
  • Foreign entities that register to do business in a US state
• Key federal exemptions (partial list):
  • Large operating companies with:
    • More than 20 full-time US employees, and
    • An operating presence at a physical office in the US, and
    • More than 5 million USD in US gross receipts or sales on their prior-year federal tax return
  • SEC-reporting issuers
  • Banks, credit unions, bank holding companies
  • Registered broker-dealers, investment companies, and investment advisers
  • Insurance companies and certain insurance producers
  • Registered money services businesses
  • Certain tax-exempt entities and qualified subsidiaries
  • Public accounting firms registered with the PCAOB
  • Subsidiaries of many exempt entities (if they are wholly owned or controlled)
• High-risk categories that are usually NOT exempt:
  • Single-member and family LLCs (including passive holding companies)
  • Real estate holding entities
  • Private investment vehicles using LLC stacks or series LLCs
  • Joint venture entities not otherwise regulated

How does the federal CTA reporting process work?

CTA reporting is done online with FinCEN and is generally free, but the company must collect detailed personal data from all beneficial owners and keep it updated. Filing timelines depend on when the entity was formed, and any subsequent change in ownership or control usually triggers a 30-day update obligation.

For most businesses, this reporting should be integrated into entity formation procedures, cap table management, and deal workflows. Internal controls should assign clear responsibility for monitoring changes that trigger updates.

Federal CTA deadlines

Information required in a CTA report

• Company information:
  • Legal name and any "doing business as" names
  • Business street address
  • Jurisdiction of formation or registration
  • IRS Taxpayer Identification Number (TIN / EIN)
• Beneficial owner information (for each individual):
  • Full legal name
  • Date of birth
  • Residential street address
  • A unique identifying number from a non-expired passport, driver's license, or similar ID
  • An image of the identification document
• Company applicant information (for entities created on or after January 1, 2024):
  • Similar personal details for the individual(s) who filed the formation or registration documents

Step-by-step: filing a CTA report

1. Determine whether the company is a "reporting company" or exempt under CTA rules.
2. Identify all beneficial owners based on ownership and substantial control tests.
3. Collect required data and ID images from each beneficial owner and company applicant.
4. Create a FinCEN ID for individuals who want to provide their data directly to FinCEN and share only their ID code with the company.
5. Log in to FinCEN's BOI e-filing system and complete the online report or upload the official PDF form.
6. Submit and retain confirmation, and integrate the report details into your entity records.
7. Implement a monitoring process to:
   • Capture changes in ownership or control
   • File updated reports within 30 calendar days when a change occurs or a prior report is incorrect

How will New York's LLC beneficial ownership law work starting January 1, 2026?

Starting January 1, 2026, New York LLCs will have to submit beneficial ownership information (or an exemption attestation) to the New York Department of State, in a regime that closely mirrors but does not replace the federal CTA. The database will be non-public, but the state will publicly flag LLCs that are "past due" on their reporting obligations.

This new law primarily affects all LLCs formed or registered in New York, including passive holding companies, real estate entities, and fund or family-office structures using LLC stacks. Corporations are not directly covered by this New York regime, although they may still have CTA obligations.

Scope of New York's LLC transparency rules

• Covered entities:
  • Domestic LLCs formed under New York law
  • Foreign LLCs registered to do business in New York
• Exempt entities:
  • LLCs that qualify for one of the CTA exemptions (for example, large operating companies, banks, SEC registrants, certain tax-exempt entities), and
  • File an Attestation of Exemption with the New York Department of State
• Information collection:
  • New York relies on the CTA definitions of "reporting company," "beneficial owner," and "exempt entity."
  • In practice, if you performed a proper CTA analysis, you can leverage that work to comply with New York's LLC rules.
• Confidentiality:
  • Beneficial owner identities will not be posted in a fully searchable public database under the amended law.
  • However, noncompliance will result in a visible "past due" or similar notation on the LLC's public state record.

What are the deadlines for existing vs new New York LLCs?

New York will phase in LLC reporting by splitting deadlines between existing entities and those formed on or after January 1, 2026. New LLCs will generally report at or shortly after formation, while existing LLCs will have an extended grace period, likely into early 2027, to file their first report or Attestation of Exemption.

The exact mechanics will be set in Department of State regulations and forms, but businesses should assume they must be ready to report quickly once their first post-2025 filing event occurs. For existing LLCs, planning throughout 2025 will avoid a year-end scramble.

Expected New York LLC reporting timelines

Ongoing update obligations in New York

• Non-exempt LLCs will need to:
  • File updates after certain changes in beneficial ownership or control, and
  • Correct any inaccuracies when discovered.
• Exempt LLCs may have to:
  • Update or renew their Attestation of Exemption if their status changes, and
  • Convert to full beneficial ownership reporting if they lose a CTA exemption.
• Expect timelines measured in days, not months, for filing updates once a change occurs.

How do New York's LLC rules differ from the federal CTA?

New York's LLC rules are modeled on the CTA but are separate, with their own forms, deadlines, and enforcement. CTA reporting goes to FinCEN and covers many types of entities; New York reporting goes to the Department of State and covers LLCs only, with public "past due" flags for noncompliance.

If you are operating an LLC in New York, you should treat federal and New York reporting as two distinct workstreams that share data but have different filing mechanics. Efficient compliance will require harmonizing the two so you collect once and file twice.

Key differences: CTA vs New York LLC transparency

How can a New York LLC file an Attestation of Exemption?

A New York LLC that qualifies for a CTA exemption will typically file an Attestation of Exemption with the New York Department of State instead of disclosing its beneficial owners. The LLC must accurately identify which federal exemption applies and keep records to prove that status, because a false or outdated attestation can still lead to penalties.

This is especially relevant for group structures where some entities are regulated or large operating companies while others are not. For each LLC, you must perform a separate exemption analysis rather than assuming the entire group is exempt.

When can you use an Attestation of Exemption?

• The LLC:
  • Meets a defined CTA exemption category (for example, large operating company, SEC registrant, bank, tax-exempt entity), and
  • Maintains that status on an ongoing basis, using the same facts and criteria used for federal CTA analysis.
• Typical examples:
  • New York LLC that is a wholly owned subsidiary of a CTA-exempt bank or public company
  • Operating company with more than 20 US employees and more than 5 million USD in US gross receipts on its federal return
  • LLC that is a disregarded entity wholly owned by a qualifying tax-exempt organization

Step-by-step: filing an Attestation of Exemption in New York

1. Conduct a CTA exemption analysis.
   • Confirm which of the federal exemptions applies to the LLC.
   • Document the basis (employee counts, revenue, regulatory registrations, group structure).
2. Gather core entity information.
   • Exact LLC name and DOS ID number
   • Jurisdiction of formation and date
   • Principal office address
3. Prepare the Attestation of Exemption form.
   • Identify the applicable exemption category by reference to CTA definitions.
   • Include any required certifications by an authorized signatory (manager, member, or officer).
4. File with the New York Department of State.
   • Submit electronically if available, or by mail if required.
   • Pay any applicable state filing fee.
5. Retain confirmation and supporting records.
   • Keep a copy with the LLC's operating agreement and minute book.
   • Store backup documentation that proves the exemption (for example, SEC filings, banking charter, tax returns).
6. Monitor your exemption status.
   • Reevaluate annually, especially after major events such as layoffs, M&A, or restructuring.
   • If the LLC no longer qualifies, plan to file a full beneficial ownership report with New York and ensure CTA federal reporting is in place.

What are the penalties for non-compliance with CTA and New York LLC disclosure rules?

Both the federal CTA and New York's LLC rules rely on civil penalties and, for serious or willful misconduct, more severe consequences. At the federal level, willful failure or false reporting can trigger significant monetary fines and, in extreme cases, criminal exposure; in New York, noncompliant LLCs can be fined, lose good standing, and be publicly flagged as "past due."

For businesses, the reputational and transactional impact is often as damaging as the formal penalty. Lenders, buyers, and counterparties increasingly treat entity compliance issues as red flags for broader governance risks.

Federal CTA penalty landscape

• Civil penalties:
  • Per-day monetary fines for ongoing willful noncompliance or failure to update.
  • Potential orders to correct and enhanced scrutiny in related investigations.
• Criminal exposure (for willful misconduct):
  • Criminal fines for knowingly providing false or fraudulent information.
  • Potential imprisonment in extreme or egregious cases.
• Collateral consequences:
  • Delays or denials in banking relationships and KYC onboarding.
  • Problems completing M&A deals when buyers require proof of CTA compliance.
  • Negative impact on government contracting eligibility and regulatory examinations.

New York LLC non-compliance consequences

• Public "past due" status:
  • If an LLC misses its reporting or exemption attestation deadline, the Department of State may mark its public record as "past due" or comparable language.
  • Anyone running a search (lender, counterparty, landlord, buyer) will see this flag.
• Civil fines and enforcement:
  • Statutory penalties for continued non-compliance, which can accrue over time.
  • Potential civil actions to compel compliance or, in severe cases, affect the LLC's ability to operate.
• Good standing and operational issues:
  • The LLC may have trouble obtaining good standing certificates.
  • Inability to complete state-level filings or certain transactions until the "past due" status is cleared.
• Group-wide impact:
  • Holding companies or special purpose LLCs used in financing or real estate structures can disrupt closing timelines if flagged as noncompliant.
  • Parent entities may have to absorb the cost and distraction of remedial clean-up projects.

When should a business hire a lawyer or compliance expert?

You should involve legal or compliance experts whenever your entity structure is complex, spans multiple states, or relies on CTA exemptions that are not obvious. Straightforward, single-entity businesses can often file CTA and New York reports on their own, but even they benefit from an initial consultation to set up a compliant process.

Given the interplay of federal and New York rules, a one-time review to map obligations across your entire entity chart usually pays for itself in avoided mistakes and transaction delays.

Situations where expert help is highly advisable

• Multiple entities and layered ownership.
  • Private equity, family office, and real estate structures with multiple tiers of LLCs and corporations.
  • Cross-border ownership involving non-US individuals or foreign entities.
• Use of exemptions.
  • Relying on the "large operating company" exemption, where revenue and employee counts can fluctuate.
  • Group structures where some subsidiaries qualify as exempt while others do not.
• High-stakes transactions.
  • Deals contingent on clean corporate and regulatory diligence (M&A, financings, recapitalizations).
  • Bond or loan covenants tied to compliance representations and warranties.
• Prior non-compliance or messy records.
  • Entities formed years ago with incomplete ownership documentation.
  • Changes in control that were never properly documented in operating agreements or minutes.

What a lawyer or expert typically delivers

• Entity-by-entity CTA and New York coverage matrix (who must file, what, and when).
• Standard operating procedures for:
  • Owner data collection and privacy management
  • Onboarding new investors or members with BOI obligations built in
  • Triggering update filings when board or ownership changes occur
• Drafts or reviews of:
  • CTA beneficial ownership reports
  • New York LLC beneficial ownership filings
  • Attestations of Exemption with backup support
• Training for internal legal, finance, or HR teams on maintaining compliance going forward.

What are the practical next steps for business owners and holding companies?

To prepare for federal CTA and New York LLC obligations, businesses should map their entity structures, centralize ownership data, and build simple repeatable processes for reporting and updates. For New York LLCs in particular, 2025 is the planning year to be ready for the January 1, 2026 go-live.

For many organizations, the key is to treat beneficial ownership reporting as a standard part of entity governance, not an ad hoc exercise each time a filing is due.

Action checklist

1. Inventory all entities.
   • Create a list of every corporation, LLC, LP, and foreign entity in your structure.
   • Identify which ones are formed or registered in New York and which are elsewhere in the US.
2. Classify each entity.
   • Is it a CTA reporting company or exempt?
   • For New York LLCs, will it likely file a beneficial ownership report or an Attestation of Exemption?
3. Build a beneficial owner register.
   • Identify ultimate individual owners and control persons for each reporting entity.
   • Capture required data (names, dates of birth, addresses, ID numbers) in a secure system.
   • Decide whether to have individuals create FinCEN IDs for easier federal reporting.
4. Calendar key deadlines.
   • Federal CTA deadlines based on each entity's creation date.
   • New York LLC initial filing window around 2026-2027 and update timelines.
   • Internal review dates ahead of any major transaction.
5. Integrate into governance documents.
   • Update operating agreements, shareholder agreements, and subscription documents to:
     • Require owners to provide BOI data when requested, and
     • Obligate owners to notify the company when their information changes.
6. Assign clear responsibility.
   • Designate a CTA / BOI compliance owner (for example, GC, CFO, or corporate secretary).
   • Train backup personnel and create simple written procedures.
7. Engage advisors where needed.
   • Have counsel review your exemption assumptions and New York-specific strategy.
   • Consider using an entity management or BOI filing service to reduce manual work.

Estimated internal and external costs

By treating federal CTA and New York LLC reporting as core parts of corporate housekeeping now, businesses can avoid last-minute scrambles, "past due" labels in public records, and deal disruptions once the New York regime goes live in 2026.