Corporate Transparency Act: The Latest Update

Updated March 2025 to reflect the latest CTA update. 

Background and prior CTA update

We previously reported that, on February 27, 2025, as a follow up to its promise to assess further options regarding BOI reporting, FinCEN announced FinCEN Not Issuing Fines or Penalties in Connection with Beneficial Ownership Information Reporting Deadlines, indicating that it will pause enforcement actions and not issue fines or penalties against companies for failing to file or update BOI reports pursuant to previously promulgated CTA reporting deadlines.

FinCEN also noted an intent to issue an interim final rule by March 21, 2025, with updated guidance on extending BOI reporting deadlines. In addition, FinCEN stated it plans to seek public comment on potential revisions to existing BOI reporting requirements and will consider those comments as part of a notice of proposed rulemaking to be issued later this year to determine whether modifications to the reporting deadlines are warranted.

FinCEN issues interim final rule removing the BOI requirement for U.S. companies

As promised an interim final rule was issued and FinCEN Removed Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons. The interim final rule revises definition of “reporting company” 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.

As a result of this interim final rule, 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 to FinCEN.

What is the effect of this “interim final rule”?

The interim final rule was submitted to the Federal Register on March 21, 2025. Per the Federal Register Guide to the Rulemaking Process, an “interim final rule” is issued when an agency believes there is good cause to issue a final rule without first publishing a proposed rule, and generally, an interim final rule becomes effective immediately upon publication in the Federal Register. In issuing this interim final rule, consistent with typical Federal Register procedures, FinCEN is accepting comments on this interim final rule and intends to finalize the rule this year.

Upon publication of the interim final rule in the Federal register, the following deadlines apply for foreign entities that are reporting companies:

• Reporting companies registered to do business in the United States before the date of publication of the IFR must file BOI reports no later than 30 days from that date.
• Reporting companies registered to do business in the United States on or after the date of publication of the IFR have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.

Next steps

Considering the information in this interim final rule and the other recent notification that FinCEN Not Issuing Fines or Penalties in Connection With Beneficial Ownership Information Reporting Deadlines, it appears that the U.S. Treasury and FinCEN is relaxing the BOI reporting requirements for U.S. companies and U.S. persons. However, the interim final rule will not be effective until formally published in the federal register.

We will continue to monitor this matter and will issue timely updates as they become available. We also suggest that you contact your legal counsel regarding your current compliance requirement under the Corporate Transparency Act.

Article Contributed by Elizabeth Hassler.