Beneficial Ownership – Do I Have to Comply with the Corporate Transparency Act?
Effective January 1, 2024, identities of owners of private companies had to be reported to the federal government in a separate filing as part of a Corporate Transparency Act requirement. The information is maintained by FinCEN with access limited to federal agencies, state agencies with a court order, and financial institutions with the consent of the company. FinCEN is working on an additional rule regarding access to these records. (Posted, November 7, 2022).
As of January, 2025, the law has been on pause pending judicial review. In a separate but related case of Texas Top Cop Shop v. Garland, the Court will hear oral arguments scheduled for March 25, 2025, which should provide more clarity regarding the reporting requirements moving forward. This means, while you can continue to comply and report beneficial ownership informaiton, you are not absolutely required to do so at this particular time (January, 2025).
Forbes wrote a good article explaining why it may be prudent to continue to comply with the FinCEN reporting while it is on pause.
February 19, 2025, annoucement- Beneficial ownership reporting requirements are back in effect, with a new deadline of March 21, 2025. FinCEN will assess its options for further modifying deadlines and revising the reporting rule.
Current Status of CTA Compliance (as of May, 2025)
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Suspension for U.S. Entities: On March 26, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule exempting all entities created in the United States—and their beneficial owners—from the requirement to report beneficial ownership information (BOI) under the CTA. This change effectively removes the reporting obligation for domestic companies.
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Focus on Foreign Entities: The revised rule narrows the definition of "reporting company" to include only entities formed under foreign laws that are registered to do business in the U.S. These foreign entities are still required to file BOI reports with FinCEN.
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Enforcement Suspension: The U.S. Department of the Treasury announced that it would not enforce any penalties or fines associated with the BOI reporting requirements against U.S. citizens or domestic reporting companies.
(Last updated May, 2025).
