The Corporate Transparency Act (CTA) initially required broad reporting from most US companies and penalties for failure to file were significant. You can read a fuller description here. This is why we encouraged our clients with any companies to comply. However, after a roller coaster year of court challenges and rulings, this has changed.
CTA no longer applies to US companies
The US Department of the Treasury's Financial Crimes Enforcement Network's (FinCEN's) interim final rules issued on March 21, 2025 significantly narrowed the scope of the CTA, which now only applies to foreign companies ("an entity formed under the law of a foreign country and registered to do business in the United States"). Foreign companies, however, will not be required to report any US citizens as beneficial owners, and US citizens will not be required to provide their personal information to foreign entities for which they are a beneficial owner.
Next steps
If you have a US company and you have already made your initial CTA filings, you do not need to take any further action and are no longer required to make updates to the information on those filings. If you have a US company and did not make an initial CTA filing, the same is true.
If you obtained and used a FinCEN identifier solely in connection with a domestic company, the interim rule suggests that there is no longer an obligation to update it. FinCEN has further advised that it is actively assessing options to allow individuals to deactivate a FinCEN identifier. However, if you obtained or used the identifier for any other purpose (including a foreign reporting company), you should continue to update the information as required within 30 days of a change since reporting requirements still apply.
If you have a foreign company and are not a US citizen, you are still required to make CTA filings and keep them updated as described here. The March 21, 2025update from FinCEN gives such companies an extra 30 days from the date of publication of the interim final rule to file their initial report.
FinCEN is accepting comments on this interim final rule until May 27, 2025 and intends to issue a final rule this year. If the final rule broadens the application of the CTA we will provide further updates. You can read the full interim final rule here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
