ALERT!
Corporate Transparency Act (CTA) Reporting is
Off-Again:
Update as of March 27, 2025
FinCEN Removes Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons, Sets New Deadlines for Foreign Companies.
On March 21, 2025 the U.S. Treasury Financial Crimes Enforcement Network (FinCEN) issued an interim final rule removing the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) under the Corporate Transparency Act (CTA).
In that interim final rule, FinCEN revises the definition of “reporting company” in its implementing regulations to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). FinCEN also exempts entities previously known as “domestic reporting companies” from BOI reporting requirements.
Key Takeaways-Guidance for Employers:
- All entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners will be exempt from the requirement to report BOI or to update or correct previously filed BOI reports to FinCEN.
- FinCEN will accept comments on the March 21 Rule for 60 days and intends to issue a final rule this year.
What is the CTA?
Enacted by the U.S. Treasury in 2021, the CTA is aimed at cutting down on fraud, money laundering and terrorism funding that can run through anonymous business entities. The CTA mandates filing of Beneficial Ownership Information Reports (BOIR) for certain business entities. Businesses filing a BOIR are required to disclose details about their beneficial owners, such as:
- Full legal name
- Date of birth
- Current residential or business address
- Unique identification number (e.g., passport or driver’s license)
We continue to monitor the issue and will keep MCAC members updated. For now, we celebrate one less reporting requirement…and hope this one is here to stay!
BACKGROUND:
January 1, 2025 – Original effective date. MCAC 4Q 2024 Newsletter: Issues on the Radar 2024
January 7, 2025 – Fifth Circuit merits panel reinstituted a preliminary injunction against the enforcement of the CTA. MCAC Alert
February 5, 2025 – U.S. Department of Justice—on behalf of Treasury—filed notice of appeal of the district court’s order and requested stay of the order during appeal.
February 18, 2025 – Court agreed to stay its January 7, 2025 order until appeal is completed. Given this decision, BOI reporting requirements of the CTA were no longer stayed and BOI reporting became mandatory. FinCEN provided additional time for companies to report, extending the deadline to March 21. MCAC Alert
March 21, 2025 – U.S. Treasury Financial Crimes Enforcement Network (FinCEN) issues interim final rule that removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act.
Supplemental Resources:
This bulletin brought to you in part by MCAC Mission Partner, Angelus Block.
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