CTA update: major change to BOI reporting requirements in interim final rule

Updated: March 25, 2025

In a new interim final rule issued by the Financial Crimes Enforcement Network (FinCEN), the agency has removed the requirement for U.S.-formed companies and U.S. individuals to report beneficial ownership information (BOI).

What changed?

FinCEN has now redefined what counts as a “reporting company” under the CTA. Going forward, only foreign entities that register to do business in the U.S. — and file with a state-level agency like a Secretary of State — will be subject to BOI reporting. Domestic companies, which were previously required to comply, are now exempt from reporting under this revised rule.

That means if your business was formed in the United States, you are no longer required to file a BOI report with FinCEN. That also includes any U.S. individuals who might have otherwise needed to be listed as beneficial owners under the prior rules.

Who still needs to report?

Only certain foreign entities — those formed under non-U.S. laws but registered to do business in a U.S. state or tribal jurisdiction — will be required to file BOI reports. Even then, there are caveats. These foreign reporting companies won’t have to disclose any U.S. persons as beneficial owners. And U.S. individuals aren’t on the hook to file anything in connection with those foreign entities, either.

New deadlines for BOI filing (for foreign entities only):

  • Foreign entities already registered to do business in the U.S. before March 21, 2025 must submit their BOI reports within 30 days of that date.
  • Foreign entities that register on or after March 21, 2025 have 30 calendar days from the effective date of their registration to file their initial BOI report.

FinCEN is currently accepting public comments on the interim rule, but as of now, this change is in effect.

What should you do now?

If your business is a domestic U.S. entity, there’s nothing more you need to do for now in terms of BOI reporting. If you’re involved with a foreign entity that does business in the U.S., there may still be reporting obligations.

As always, we’re keeping an eye on further guidance or clarification from FinCEN. If you have questions about how this update affects your business, or you’re unsure about your filing obligations, feel free to reach out to our team.

CTA/BOI Update: Treasury Department Announces Suspension of Enforcement of CTA Against U.S. Citizens and Domestic Reporting Companies

(Updated 3/6/2025)

Overview of Latest Development

On Sunday, March 2, 2025, the Department of Treasury (“Treasury”) issued a press release (Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies | U.S. Department of the Treasury), announcing that it will not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, nor will it enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect.

Further, the Treasury will issue proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only, “in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.”

The Treasury’s announcement is good news that comes on the heels of FinCEN’s announcement on Thursday, February 27, 2025, that it will pause enforcement actions and not issue fines or penalties against companies for failing to file or update beneficial ownership information reports pursuant to previously promulgated Corporate Transparency Act reporting deadlines.

CTA/BOI Update: CTA-BOI Reporting Deadline Now March 21st 

(Updated 2/21/2025)

Overview of Latest Developments

On Tuesday, February 18, 2025, the U.S. District Court for the Eastern District of Texas lifted the nationwide injunction in the Smith, et al. v. U.S. Department of The Treasury, et al. case and the beneficial ownership information reporting requirements under the Corporate Transparency Act are once again in effect for most reporting companies.

FinCEN updated its alert (“Alert”) on February 19, 2025, acknowledging that in light of the District Court’s decision, reporting companies, except those specifically named in the Alert, are once again required to file beneficial ownership information with FinCEN. The Department of the Treasury acknowledged that reporting companies may need additional time to comply with their BOI reporting obligations, and accordingly extended the reporting deadline 30 calendar days from February 19, 2025, for most companies as follows:

  • For the vast majority of reporting companies, the new deadline to file an initial, updated, and/or corrected BOI report is now March 21, 2025. FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided.
  • Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond March 21, 2025. These companies should abide by whichever deadline is later.
  • Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.) — namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024) — are not currently required to report their beneficial ownership information to FinCEN at this time.

Further, FinCEN has stated that over the next 30-day period, it will assess its options to further modify deadlines or reporting requirements for lower-risk entities, including many U.S. small businesses, while prioritizing reporting for those entities that pose the most significant national security risks.

In addition, we do want you to be aware of recent legislative development as efforts continue to seek a delay of the reporting deadline and on February 10, 2025, the House unanimously passed the Protect Small Businesses From Excessive Paperwork Act of 2025 (H.R. 736), which would delay the beneficial ownership information mandatory reporting requirement due date to January 1, 2026, for entities formed prior to January 1, 2024. The bill has now been sent to the Senate.

Next Steps

We strongly encourage any entity deemed a reporting company under the CTA to timely file their BOI reporting by the extended filing deadlines stated above.

If you have any questions regarding the legal implications of these recent court or legislative proceedings or need a legal determination as to whether an exemption applies to your entity or whether legal relationships constitute beneficial ownership, we strongly encourage you to consult legal counsel with expertise in this area to assist your organization.

Note that penalties for willfully violating the CTA’s reporting requirements include (1) civil penalties of up to $606 per day that a violation is not remedied, (2) a criminal fine of up to $10,000, and/or (3) imprisonment of up to two years.

For additional information regarding the beneficial ownership reporting requirements under the CTA, refer to FinCEN’s Frequently Asked Questions document at https://www.fincen.gov/boi-faqs or to the FinCEN Reference Materials at  https://www.fincen.gov/boi/Reference-materials for detailed information and updated guidance regarding any further deadline changes that may be promulgated.

As always, please feel free to contact us if you have any questions.

CTA-BOI Reporting Deadline Remains Paused

(Updated 1/31/2025)

Overview of Latest Developments

On January 24, 2025, FinCEN issued additional guidance with respect to the U.S. Supreme Court’s ruling to lift the nationwide injunction issued by a federal judge in Texas that enjoined enforcement of the Corporate Transparency Act (CTA). Because a separate nationwide order issued by a different federal judge in Texas remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN. However, FinCEN has advised that reporting companies may continue to voluntarily submit beneficial ownership information reports.

With this update, reporting companies do not have filing obligations, but it is advised to be prepared to meet these requirements in the event enforcement of the BOI reporting resumes.

Corporate Transparency Act: Beneficial Ownership Information Reporting (Updated: January 2025)

Overview of Latest Developments

In the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.), the U.S. District Court for the Eastern District of Texas issued an order granting a nationwide preliminary injunction against enforcing the CTA’s BOI reporting requirements.

On Monday, December 23, 2024, the Fifth Circuit Court of Appeals stayed the nationwide preliminary injunction, which meant that the injunction was no longer in effect.

However, on December 26, 2024, a different panel of the Fifth Circuit Court of Appeals issued a new order effectively reinstating the nationwide preliminary injunction. As a result, the beneficial ownership reporting requirements of the CTA are paused yet again and enforcement is suspended pending further proceedings. Accordingly, as of December 26, 2024, reporting companies are NOT currently required to file beneficial ownership information under the CTA until further court order.

FinCEN has issued an alert acknowledging that in light of the December 26, 2024 federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, FinCEN noted that reporting companies may continue to voluntarily submit beneficial ownership information reports.

Refer to FinCEN’s Frequently Asked Questions or to the FinCEN’s Reference Materials for detailed information and updated guidance regarding any further deadline changes that may be promulgated.

Next Steps

From our firm’s perspective, preparation remains paramount given the complexities of the current legal and regulatory landscape of the CTA. We strongly encourage any entity deemed a reporting company under the CTA to continue to gather and maintain accurate information about their beneficial owners and company applicants. Given the fluid nature of this situation, it is critical that you closely monitor further developments, including guidance from FinCEN impacting the timing of compliance requirements.

If you have any questions regarding the legal implications of these recent court proceedings or need assistance with a legal determination as to whether an exemption applies to your entity or whether legal relationships constitute beneficial ownership, we strongly encourage you to reach out to legal counsel with expertise in this area to assist your organization.

Corporate Transparency Act: Beneficial Ownership Information Reporting

As of January 1, 2024, the bipartisan Corporate Transparency Act (CTA), enacted in 2021 to curb illicit finance, requires many companies doing business in the United States to report information to the Financial Crimes Enforcement Network (FinCEN) about the individuals who ultimately own or control them – Beneficial Ownership Information (BOI) reporting. FinCEN is a bureau of the U.S. Treasury Department.

As the CTA is not a part of the tax code, the assessment and application of many of the requirements set forth in the regulations, including but not limited to the determination of beneficial ownership interest, necessitates the need for legal guidance and direction. As such, since we are not attorneys, our firm is not able to provide you with any legal determination as to whether an exemption applies to the nature of your entity or whether legal relationships constitute beneficial ownership.

We are providing this information not as legal advice, but simply to acquaint you with the general requirements of the CTA and its reporting deadlines. We strongly recommend that you consult legal counsel with expertise in this area to determine the statute’s application to your particular situation.

Preliminary Injunction Halts BOI Enforcement

As of December 3, 2024, the U.S. District Court for the Eastern District of Texas (Sherman Division) issued a preliminary injunction, “[t]he Court has determined that the CTA and Reporting Rule are likely unconstitutional for purposes of a preliminary injunction. It has not made an affirmative finding that the CTA and Reporting Rule are contrary to law or that they amount to a violation of the Constitution.” The Court went further and ruled that this is a nationwide injunction, applying against enforcement of the CTA and its impending January 1, 2025 filing deadline. We note this is a preliminary injunction, and we urge reporting companies to pay attention for additional updates and proceedings in this and other cases which could modify or change this order.

Voluntary Submission

According to an alert on fincen.gov, “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”

Determining Your Business Requirements

A company may need to report beneficial ownership information to FinCEN if it is:

  • a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
  • a foreign company that was registered to do business in any U.S. state or Indian tribe by such a filing.

Twenty-three types of entities are exempt from beneficial ownership information reporting requirements, including publicly traded companies, nonprofits, and certain large operating companies.

FinCEN has provided its Small Entity Compliance Guide which includes a flowchart in chapter 1.2 to determine if your business qualifies for reporting: FinCEN Small Entity Compliance Guide

Original Deadline

Except as impacted by the preliminary injunction, companies that are required to comply (“reporting companies”) must file their initial reports by the following deadlines:

  • Existing companies: Reporting companies created or registered to do business in the United States before January 1, 2024, must file by January 1, 2025.
  • Newly created or registered companies:
    • Reporting companies created or registered to do business in the United States in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.
    • Beginning in 2025, newly created or registered companies will have 30 days.

As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. However, this civil penalty amount is adjusted annually for inflation. As of the time of publication of this FAQ, this amount is $591. A person who willfully violates the BOI reporting requirements may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.

Filing Information

Filing is simple, secure, and free of charge. Beneficial ownership information reporting is not an annual requirement. A report only needs to be submitted once, unless the filer needs to update or correct information.

Follow this link to file BOI reporting: https://boiefiling.fincen.gov/

FinCEN has created a step-by-step guide to completing this form: https://youtu.be/GydCvfbKxPw