Most condo sponsor LLCs are exempt from NY's transparency act.

More than two years after the NY Legislature passed the LLC Transparency Act, the law's reach on NYC condo sponsors sits at nearly zero. Governor Hochul's December 19, 2025 veto of S.8432 left the statute covering only LLCs formed outside the United States. Virtually every condo project LLC in New York is domestic. The disclosure gap the law was expected to close is still open.

What the NY LLC Transparency Act was designed to do.

NY's LLC Transparency Act (Chapter 772, Laws of 2023) was designed to mirror the federal Corporate Transparency Act, which Congress enacted in 2021 to address anonymous shell-company ownership. The state law requires covered LLCs to file a beneficial ownership information statement with the NY Department of State, naming each person who owns 25 percent or more of the company or who exercises substantial control over it.

For NYC condo buyers and accountability organizations, the appeal was direct: condo sponsor LLCs have historically been difficult to trace. An offering plan names the LLC sponsor but not the humans behind it. ACRIS adds deed chains; NYSCEF adds court records; but the sponsor's ultimate beneficial owners remained off the public record at the pre-litigation stage. The LLC Transparency Act appeared to change that. A sponsor LLC holding a condo conversion at a specific address would need to name its beneficial owners at NYDOS. Buyers and reporters would, for the first time, have a non-litigation path to the humans who signed the offering plan. That is what the law was designed to deliver.

S.8432 would have covered domestic LLCs. The governor vetoed it.

The NY LLC Transparency Act as originally enacted relied on the federal CTA's definitions of "reporting company" and "exempt company." That reliance created a structural problem: in 2024 and 2025, federal courts issued multiple injunctions against FinCEN's enforcement of the CTA, and FinCEN ultimately paused the program for domestic US entities. With the federal backbone gone, the NY statute's reach contracted along with it.

S.8432 was the proposed fix. Introduced in 2025, the bill would have decoupled the NY law from the federal CTA definitions and established a standalone NY definition of "reporting company" that covered all LLCs formed in New York, as well as foreign LLCs authorized to do business here. Under S.8432, the beneficial ownership obligation would have applied regardless of what FinCEN did or did not enforce.

Governor Hochul vetoed S.8432 on December 19, 2025. Her veto memorandum stated that "imposing additional requirements on LLCs is not in the interest of New York State" and that the NY law was intended to track federal requirements rather than exceed them. With the veto, the NY LLC Transparency Act retained its federal-CTA structure. For domestic LLCs, those formed in any US state or territory, the reporting obligation does not apply.

What the NY Department of State confirmed on December 31, 2025.

One day before the law took effect, the NY Department of State updated its Beneficial Owner Disclosure website to address the scope question directly. The guidance confirmed that the act "is only applicable to limited liability companies formed outside the United States that are authorized to do business in New York State."

Domestic LLCs are exempt. US-formed LLCs are not required to report beneficial ownership information to NYDOS, and they are not required to file an attestation of exemption. No filing, no disclosure, no public record for US-formed entities. The December 31 confirmation came from the enforcing agency on the day before the law's effective date. Multiple law firms, including Sidley Austin and Holland & Knight, published analyses in January and February 2026 citing that guidance directly.

How NYC condo sponsors typically organize their project LLCs.

Condo sponsors in New York do not typically use foreign LLCs. The standard structure is a New York State-formed LLC or a Delaware-formed LLC qualified to do business in New York. Both are domestic entities. Both are exempt from the NY LLC Transparency Act as it now stands.

The offering plan that every condo conversion must file with the AG's Real Estate Finance Bureau identifies the sponsor by entity name. A typical filing shows something like "123 Main Street Holdings LLC" as the offeror. The REFB reviews the plan against the AG's 13 NYCRR Part 18 requirements; it does not require the LLC to file beneficial ownership information, and it does not make that information public.

The result is that the two disclosure paths a buyer, a reporter, or an accountability organization might try before filing suit — the NYDOS beneficial ownership registry and the REFB offering-plan database — neither one captures the humans behind a domestic sponsor LLC.

What the 2025-2026 legislative session did not address.

The Albany session closed on June 4, 2026, without enacting any bill to expand the LLC Transparency Act's scope to domestic entities. The same session that failed to advance S.71 (managing-agent licensure) for the tenth consecutive year also failed to produce a successor to the vetoed S.8432.

After the December 2025 veto, no successor bill to S.8432 moved out of committee in the 2026 legislative year. No floor vote on a replacement measure was scheduled or held before the session closed. The filing deadline for non-US LLCs authorized to do business in New York before January 1, 2026 runs to December 31, 2026. That deadline covers a narrow slice of the NYC real estate market. Domestic condo sponsors face no equivalent deadline and no equivalent obligation under current law.

The pattern follows the ten-bill legislative graveyard documented on this site: a bill passes one chamber, or reaches an advanced draft, then stalls. In this instance, the bill that would have fixed the domestic-entity gap was vetoed by the executive, and the Legislature did not return to override or replace it.

Where disclosure still works, and where it stops.

The domestic-entity gap does not eliminate all paths to sponsor identity. Several tools still work, within limits.

The AG's REFB offering-plan database is public and searchable. It identifies the sponsor entity and the attorney of record for every registered offering plan. If the sponsor is a known LLC name, you can pull the plan and trace the attorney's prior engagements. The Martin Act gives the AG enforcement authority over offering-plan misrepresentations; a documented pattern of misrepresentation by the same attorney or the same entity network can support a complaint even without beneficial ownership information.

ACRIS is also searchable by entity name. If 123 Main Street Holdings LLC also appears in earlier deed transfers across multiple buildings, that chain is public record and builds the entity network even absent the human owners.

Civil discovery, once a case is filed, can reach beneficial ownership information through document requests. The companion post on writing an AG REFB complaint notes this dynamic: a well-structured complaint paired with a plenary civil action in Supreme Court is more effective than a complaint alone, precisely because it opens the discovery channel. The LLC Transparency Act was supposed to provide a pre-litigation disclosure path. For domestic sponsors, that path does not currently exist.

Bottom line.

The NY LLC Transparency Act took effect January 1, 2026. For the fraction of LLC sponsors organized under the laws of a country outside the United States, it created a disclosure obligation. For the domestic LLCs that structure the overwhelming majority of NYC condo and co-op sponsor activity, it did not.

Governor Hochul's December veto of S.8432 kept the law tethered to a federal program that is itself under legal challenge and effectively paused for domestic entities. Albany adjourned in June 2026 without correcting the gap. The pre-litigation transparency window that the 2023 law appeared to open remains closed for domestic sponsors through at least the 2027 session.

Buyers and owners who need to trace the humans behind a sponsor LLC still require either a litigation trigger or the AG REFB complaint route. The sponsor control period abuses issue page on this site documents where that opacity does the most harm. Neither path is self-service, and neither was made easier by the law that came closest to changing that.

Primary sources:
NY LLC Transparency Act, Chapter 772, Laws of 2023 — Governor Hochul, Veto Memorandum, S.8432/A.8662, December 19, 2025 — NY Department of State, Beneficial Owner Disclosure Guidance, December 31, 2025 — Sidley Austin analysis, February 2026 — Holland & Knight analysis, January 2026

Companion resources: What the LLC Transparency Act was expected to do  ·  What the Martin Act can and cannot reach  ·  How to write an AG REFB complaint  ·  2026 session: which bills did not advance  ·  Issue: sponsor control period abuses  ·  AG complaint tool