"Corporate Transparency Act Suspended Indefinitely: Key Updates for Clients."

The Corporate Transparency Act (“CTA”), was enacted as part of the Anti-Money Laundering Act of 2020, aiming to enhance financial transparency by requiring certain business entities to file a beneficial ownership information (“BOI”) report with the Financial Crimes Enforcement Network (“FinCEN”). However, recent court rulings have challenged the constitutionality of these requirements, leading to the suspension of the BOI reporting requirements.

Key Takeaways for Clients

• No Penalties or Fines for U.S. Citizens or Domestic Companies: U.S. companies and U.S. individuals are no longer required to submit BOI reports under the CTA. Penalties for non-compliance have been lifted.
• Revised definition of “Reporting Company”: The interim final rule now defines “reporting company” to means 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. FinCEN further exempts entities previously known as “domestic reporting companies” from BOI report requirements.
• BOI Reporting for Foreign Entities: Foreign entities that are required to submit BOI reports to FinCEN do not need to report to any U.S. person as beneficial owners.

What This Means for You

• Foreign entities that became a reporting company before March 26, 2025, are required to file an initial report no later than April 25, 2025.
• Any foreign entity that becomes a reporting company on or after March 26, 2025, is required to file an initial report within 30 calendar days of the earlier of the date on which it receives actual notice that it has been registered to do business or the date on which a secretary of state or similar office first provides public notice, such as through a publicly accessible registry, that the reporting company has been registered to do business.

Comments on Interim Final Rule:

FinCEN is accepting comments on the interim final rule until May 27, 2025. Comments may be submitted in the following methods:

• Federal E-rulemaking Portal: https://www.regulations.gov. Follow the instructions for submitting comments. Refer to Docket Number FINCEN-2025-0001 and the Office of Management and Budget (OMB) control number 1506-0076.
• Mail: Policy Division, Financial Crimes Enforcement Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-2025-0001 and OMB control number 1506-0076.

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