New for 2026: The New York LLC Transparency Act's Impact on Nonprofit Organizations

As 2025 ended, New York Governor Hochul vetoed legislation that would have expanded the reach of New York's Limited Liability Company Transparency Act (NY Transparency Act) to impose new filing requirements on U.S. and non-U.S. nonprofits that have LLCs formed and/or registered to do business in New York within their organizational structures. Governor Hochul's veto of Senate Bill S8432 effectively makes the NY Transparency Act's beneficial ownership disclosure reporting and exemption affirmation requirements applicable only to LLCs formed outside the United States that are registered to do business in New York. Foreign nonprofits and foreign LLCs doing business in New York should be prepared to comply with the new requirements, which became effective on January 1, 2026, and monitor further developments.

Background

As enacted, the NY Transparency Act incorporates key definitions of reporting and exempt companies, and beneficial owners by reference to the federal Corporate Transparency Act (CTA) and requires reporting companies to disclose beneficial ownership information. Earlier in 2025, the U.S. Department of Treasury's Financial Crimes Enforcement Network (FinCEN) issued an interim final rule revising the CTA's definition to apply only to entities formed under the laws of a foreign country and that have registered to do business in any U.S. state or tribal jurisdiction. The proposed amendment would have codified state-level reporting definitions directly in the NY Transparency Act to ensure that the disclosure requirements applied to domestic New York LLCs regardless of federal enforcement policy. Governor Hochul's veto memorandum explains that she vetoed Senate Bill S8432 because it would have created mandatory reporting requirements in New York that are not required under federal law.

Unlike the federal CTA, exemption from reporting is not automatic, and the NY Transparency Act requires "exempt companies" to file an attestation of exemption with the New York Department of State (NYDOS). However, at this time, and because of FinCEN's narrow definitional interpretations, the NY Transparency Act's attestation requirement applies only to "exempt companies" formed outside of the United States and registered to do business in New York. Guidance released by the New York Department of State in the form of frequently asked questions confirms that U.S.-formed LLCs are not required to make any filings under the NY Transparency Act, including exempt company attestations, even if registered to do business in New York.

Disclosure Requirements and Exemptions

Each foreign "reporting company" must report certain beneficial ownership information to the NYDOS, unless an exemption applies. Reports must identify foreign beneficial owners and disclose the individual's full legal name, date of birth, current home or business street address, and a unique identifying number from a valid identification document. FinCEN identifier numbers are not able be used for DOS filings, and there is currently no New York identification number that can be used instead of providing identifying information. Reporting companies are not required to include beneficial ownership information for owners who are U.S. persons, including citizens of Puerto Rico or other U.S. territories.

An "exempt company" under the NY Transparency Act is an LLC or a foreign LLC that meets one of 23 categories for exemption from the definition of a "reporting company" under the federal CTA. The following nonprofit-related organizations fall under the definition of an "exempt company":

• Section 501(c) organizations that have not lost their tax-exempt status for more than six months, Section 527 political organizations, and Section 4947 charitable and split-interest trusts
• Single-member LLCs wholly owned by any of the above organizations
• Multi-member LLCs owned or controlled entirely by two or more of the above organizations

LLCs formed in the United States or a U.S. territory are not required to report beneficial ownership information to NYDOS or file attestations of exemption. But LLCs that were formed under the law of a foreign country and are authorized to do business in New York will need to file beneficial ownership disclosure statements or attestations of exemption.

For example, an LLC (or its equivalent) formed in the United Kingdom and registered to do business in New York that is wholly owned by a foreign charity would be a reporting company and not an "exempt company" and thus would be required to disclose beneficial owners to NY DOS. Conversely, the same foreign LLC, if owned by a foreign charity that is a Section 501(c)(3) organization, would not be required to file a beneficial ownership report but must instead file an attestation of exemption with NYDOS.

Importantly, the exemption from reporting for LLCs subject to the NY Transparency Act does not apply to Section 501(c) organizations that lose their tax-exempt status for more than six months (until tax exemption is reinstated); multi-member LLCs in which one or more tax-exempt organizations, political organizations, or trusts are minority owners (e.g., a joint venture with a for-profit partner); or an LLC owned by a taxable subsidiary of a nonprofit.

Filing Deadlines

Initial obligations for filing beneficial ownership disclosure and/or attestations of exemption are as follows:

LLCs that qualify as exempt companies are required to file the attestation of exemption—electronically and under penalty of perjury. Attestations must be filed by a member or manager of the LLC in the form designated by the NYDOS, indicating the specific exemption claimed. All regulated companies, whether reporting or exempt, must also file annual updates with the NYDOS (either to submit an attestation of exemption or to confirm and update their beneficial ownership disclosure information). If the basis for the claimed exemption ceases to exist, the LLC becomes required to file a beneficial ownership reporting statement.

Penalties

LLCs that fail to file the initial report, attestations, or annual update within 30 days from the applicable deadline will be marked as "past due" on the DOS's records. LLCs that fail to file for a period of two years from the applicable filing deadline will be marked as "delinquent." An LLC may be assessed fines of up to $500 for each day the LLC is past due or delinquent in its filings. An LLC can resolve its past due or delinquent status by submitting the filing, paying a $250 fine, and receiving verification from the Office of the New York State Attorney General that any penalties imposed have been paid.

Next Steps

Nonprofits should determine whether they have an ownership interest in any foreign LLCs doing business in New York that will be subject to beneficial ownership reporting or attestation requirements with the NYDOS. While the law currently applies only to non-U.S. LLCs registered to do business in New York, it is possible that there could be changes to the interpretation of the CTA that impact the scope of the NY Transparency Act, or new legislative amendments may be introduced in New York to clarify the definitions of reporting and exempt companies.

NYDOS recently published guidance about the NY Transparency Act on its website. The guidance includes the instructions for filing beneficial ownership disclosure reports and attestations of exemptions, and indicates that a submission portal is coming soon. For now, completed disclosures and exemption claims with a credit/debit card authorization for payment of the statutory filing fee for each form can be submitted by email to dosCorpBOI@dos.ny.gov.

Venable plans to monitor forthcoming NYDOS updates regarding electronic submission and any additional reporting guidance.