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UPDATE - The Corporate Transparency Act

FinCEN Issues Interim Final Rule on Corporate Transparency Act

The Financial Crimes Enforcement Network ("FinCEN") issued an Interim Final Rule on March 21, 2025 removing the requirement for US companies and US individuals to report beneficial ownership information ("BOI") to FinCEN under the Corporate Transparency Act ("CTA"). This Interim Final Rule changes the definition of "reporting company" within the CTA to include only those entities formed under the laws of a foreign country and are registered to do business in a U.S. State or Tribal jurisdiction.

Under this Interim Final Rule, all entities created in the U.S. (previously referred to as "domestic reporting companies") and their beneficial owners, are exempt from the BOI reporting requirements. Foreign entities that meet the new definition of "reporting company" that do not qualify for a BOI exemption are still required to file a BOI report to FinCEN, though the foreign entity does not have to report BOI with respect to any U.S. person who is a beneficial owner. 

As of the publication of the Interim Final Rule, the following deadlines apply for foreign entities that fall under the definition of reporting company: 

  1. Reporting companies registered to do business in the US prior to the date of publication of the Interim Final Ruling (March 21, 2025) must file BOI reports no later than 30 days from that date. 
  2. Reporting companies registered to do business in the US on or after the date of publication of the Interim Final Ruling (March 21, 2025) have thirty (30) calendar days to file an initial BOI report after receipt of notice that their registration is effective. 

History of the CTA:

  1. In 2021, Congress passed the CTA and set a January 1, 2025 deadline for businesses to file initial reports.
  2. On December 3, 2024, the US District Court for the Eastern District of Texas issued a nationwide preliminary injunction which suspended the enforcement of the CTA in Texas Top Cop Shop, Inc. v. McHenry. This injunction relieved reporting companies of the obligation to file Beneficial Ownership Information reports (“BOI reports") just a few weeks before the January 1, 2025, compliance date. The deadline for compliance was also stayed.
  3. On December 23, 2024, a motions panel of the 5th Circuit overturned the injunction, reviving the CTA, and the government responded by postponing the BOI reporting deadline to January 13, 2025.
  4. On December 26, 2024, another 5th Circuit panel reinstated the nationwide injunction, citing the need to preserve the status quo while it reviews the substantive arguments submitted by the parties within the appeal.
  5. On January 7, 2025, a district court judge in the Eastern District of Texas in another case (Smith v. U.S. Department of the Treasury) also ordered a stay of the FinCEN BOI reporting deadline during the pendancy of the lawsuit, based upon different facts and arguments.
  6. On January 23, 2025, the U.S. Supreme Court granted the government's motion to stay the nationwide injunction issued by Texas Top Cop Shop, Inc. v. McHenry. Despite the Supreme Court's ruling, the BOI reporting requirements remain on hold due to the stay issued within the Smith v. U.S. Department of the Treasury case.
  7. On February 18, 2025, the U.S. District Court for the Eastern District of Texas granted the U.S. Department of Justice's motion to stay a universal injunction of the Corporate Transparency Act (CTA”)'s effective date.
  8. On February 21, 2025, FinCEN issued a notice announcing that the beneficial ownership information reporting requirements are back in effect, subject to a 30-day extension. For most filers, that new deadline is March 21, 2025.
  9. On February 27, 2025, FinCEN announced that it will not issue fines or penalties against companies for failure to file or update BOI reports by the current deadlines. 
  10. On March 2, 2025, US Department of the Treasury issued an announcement that the Treasury Department will suspend enforcement of the CTA against US citizens and domestic reporting companies. 

For additional information on CTA reporting requirements, see our previously published article “The Corporate Transparency Act” from January 19, 2024.

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