The information contained in this document is marketing material and for informational purposes only. The information contained in this document is presented without any warranty or representation as to its accuracy or completeness and all implied representations or warranties of any kind are hereby disclaimed. Recipients of this document, whether clients or otherwise, should not act or refrain from acting on the basis of any information included in this document without seeking appropriate professional advice. The provision of the information contained in this document does not establish any express or implied duty or obligation between Citco and any recipient and neither Citco nor any of its shareholders, members, directors, principals or personnel shall be responsible or liable for results arising from the use or reliance of the information contained in this document including, without limitation, any loss (whether direct, indirect, in contract, tort or otherwise) arising from any decision made or action taken by any party in reliance upon the information contained in this document. © The Citco Group Limited, December 2024.
United States: New UBO Requirements for New York Limited Liability Companies
New York Leads the Way on Transparency
From the 1st of January 2026, New York will become the first U.S. state to require limited liability companies (LLCs) to disclose their beneficial ownership information (BOI) each year to the Department of State.
The New York Limited Liability Company Transparency Act (NY LLCTA) introduces clear obligations for LLCs to identify their ultimate beneficial owners (UBOs) while maintaining strict confidentiality safeguards.
Background: The Corporate Transparency Act Turbulence
The federal Corporate Transparency Act (CTA), enacted in 2021, was designed to strengthen U.S. anti-money-laundering and counter-terrorism frameworks by compelling roughly 33 million businesses to report BOI to the Financial Crimes Enforcement Network (FinCEN).
| Timeline | Regulatory Developments |
|---|---|
| 2021 | Congress passes the CTA. |
| 1 Jan 2024 | CTA takes effect. |
| 3 Dec 2024 | A Texas federal court issues a nationwide injunction, ruling the CTA unconstitutional under the Commerce Clause and Necessary and Proper Clause. |
| 23 Dec 2024 | The Fifth Circuit reverses the injunction. |
| 26 Dec 2024 | A merits panel reinstates it, halting enforcement again. |
| 23 Jan 2025 | The U.S. Supreme Court lifts the injunction. |
| 18 Feb 2025 | FinCEN extends filing deadlines to 21 March 2025. |
| 2 Mar 2025 | FinCEN announces it will not enforce the CTA against U.S. citizens or domestic companies. |
| 21 Mar 2025 | FinCEN issues an interim final rule, effectively suspending BOI obligations for U.S. entities. |
The result: The federal framework remains uncertain for U.S. domestic businesses who currently face no filing obligations, while foreign entities operating within the U.S. remain in scope and must still comply with the CTA’s beneficial ownership reporting requirements.
The divide between domestic and foreign reporting obligations has created a fragmented federal transparency landscape – prompting states such as New York to step in with their own state level disclosure framework.
What the NY LLC Transparency Act Requires
The NY LLCTA introduces comprehensive disclosure rules for all LLCs formed or registered to do business in the state.
Who Must Report
• In-scope: All New York LLCs and foreign LLCs qualified to operate in the state.
• Exempt: Publicly traded companies, banks, and nonprofit organizations.
Exempt entities must still file an annual attestation of exemption.
Information to Disclose
Each filing must identify every UBO, including:
• Full legal name
• Date of birth
• Business or residential address
• Government-issued identification number
Definition of a UBO
A UBO is any individual who:
• Directly or indirectly owns or controls 25 % or more of the LLC’s ownership interests; or
• Exercises substantial control over the entity. If a beneficial owner is a company, its individual owners must also be disclosed.
Confidential but Enforceable
The reported information will not be public. Data will be stored in a secure state database accessible only to:
• Government agencies and law enforcement
• Financial institutions performing due diligence
This mirrors the intent of the federal CTA – combating illicit activity without exposing sensitive, personal ownership data
Penalties for Non-Compliance
Failure to comply can lead to:
• “Past-due” status after 30 days
• “Delinquent” status after two years
• Fines up to US $500 per day
• Suspension or dissolution of the LLC’s authority to operate in New York
Why It Matters
The NY LLCTA reflects a broader shift toward state-level transparency in the absence of a stable federal regime. Other states are expected to monitor New York’s implementation closely – and may adopt similar legislation to ensure consistent anti-money-laundering standards.
For businesses, the message is clear: UBO transparency is becoming a permanent feature of U.S. corporate regulation. As more jurisdictions introduce their own requirements, companies operating across multiple states will face increasing compliance complexity.
Early preparation will be critical – organisations should establish internal systems for tracking beneficial ownership, documenting control structures, and coordinating filings across federal and state lines.
How Mercator® by Citco Can Help
Our team of local and subject matter experts can assist with:
• Preparing and submitting NY LLCTA filings
• Assessing and documenting exemption eligibility
• Developing multi-jurisdictional UBO compliance strategies
We help clients stay ahead of shifting regulatory frameworks while maintaining accuracy, confidentiality, and operational efficiency.
Contact mercator@citco.com for more information on UBO services.
LeAnn Austin
Senior Legal Officer, Mercator® by Citco, Citco (Delaware) Inc.
