The New York Corporate Transparency Act (NYCTA) WILL NOT apply to US-registered LLCs.
In recent years, there has been significant interest in identifying the “beneficial owners” of U.S. businesses to combat perceived financial crimes such as money laundering, terrorism financing, and tax fraud by ending the use of anonymous shell companies. This led to the enactment of the federal Corporate Transparency Act (CTA). When it was first enacted, the CTA applied to all new and existing LLCs, with some exceptions (primarily entities that are required to identify the people involved in other ways). Well-intentioned though it may have been, the CTA ended up on a torturous, on-again, off-again path, resulting in major changes to its applicability. The end result is that definitions were changed, and the federal CTA no longer applies to domestic entities or U.S. persons.
New York’s Approach to Beneficial Ownership Reporting
New York began developing its own CTA. In the first iteration, the beneficial owner database was to be public. Among other things, this meant that any renter in a New York City apartment building held in the name of an LLC could immediately determine who owns the LLC and where they live. Not a particularly positive development for landlords with disgruntled tenants. The ensuing discomfort led to a revision that made the database of names available only to law enforcement and certain agencies.
Why the NYCTA Currently Does Not Apply to Domestic LLCs
The New York Corporate Transparency Act (NYCTA) is set to go live on January 1, 2026, with a non-public database. Certain parts of the NYCTA, however, incorporate the federal Corporate Transparency Act (CTA) by reference. For example, the NYCTA uses many of the definitions that are found in the federal CTA. Along the torturous path the CTA took to reach its current toothless status, the CTA reporting rule was revised to completely eliminate reporting requirements for domestic entities and U.S. persons. This effectively limited CTA reporting requirements to LLCs formed outside the U.S. Since the NYCTA uses CTA definitions, New York is stuck with the same rule, limiting NYCTA reporting to only foreign LLCs and individuals.
Governor Hochul’s Veto and What It Means for 2026
In response, the New York Legislature passed additional legislation that addressed this issue. The legislation confirmed that the NYCTA applies to all LLCs formed in the State of New York, foreign or domestic. However, when the legislation landed on Governor Hochul’s desk, she vetoed it (December 19, 2025). This leaves those definitional issues unresolved. The result is that, while the NYCTA will still take effect on January 1, 2026, it will not apply to domestic entities or U.S. persons.
What New York LLCs Should Do Now
If you have a domestic LLC registered in the State of New York or will be forming a new LLC in the State of New York, and you are a U.S. person, you do not need to complete any filing relative to the NYCTA. Stay tuned – this likely isn’t the last word on the NYCTA, and this is a fluid area.
Scarinci Hollenbeck is also tracking related state-level developments affecting corporate transparency, including recent amendments to Delaware’s corporation law. If you have any questions about these changes, please contact us at Scarinci Hollenbeck.
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