Overview
The US Corporate Transparency Act (CTA) has undergone significant changes since it was first implemented. Enacted to enhance financial transparency and strengthen anti-money laundering efforts, the CTA established a framework requiring corporations, limited liability companies, limited partnerships, and other similar entities to disclose beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), a bureau within the US Department of the Treasury.
On March 26, 2025, FinCEN issued an interim final rule that eliminates the beneficial ownership information (BOI) reporting requirement for US companies and US persons under the CTA. Foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements must report their BOI to FinCEN under the applicable deadlines; however, these foreign entities will not be required to report any US persons as beneficial owners, and US persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner. More details can be found at FinCEN’s Beneficial Ownership Information Reporting page.
While the CTA continues to represent a major shift in beneficial ownership reporting, its scope has been substantially narrowed, reshaping the compliance landscape for both US and international stakeholders.
Explore our collection of insights and resources to stay up to date on the CTA. McDermott can help you navigate these complex rules and determine how they may apply to you and the entities you own or control.
Insights
Corporate Transparency Act Update: Penalties Paused & Significant Reduction in Scope Expected in Forthcoming Rulemaking (3/10/25): On March 2, 2025, the US Department of the Treasury (“Treasury”) issued a press release clarifying that Treasury will not enforce any penalties or fines associated with the Corporate Transparency Act’s (“CTA”) implementing regulation (“Reporting Rule”) under the existing deadlines and will “not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect.” In the press release, Treasury also stated that it will be “issuing a proposed rulemaking that will narrow the scope of the [Reporting Rule] to foreign reporting companies only.”
CTA Penalties Suspended; New Rulemaking Proposed (3/4/25): The Financial Crimes Enforcement Network (FinCEN) and the US Department of the Treasury have announced that no penalties or fines will be imposed for failing to submit a beneficial ownership information (BOI) report by the recently announced March 21, 2025, deadline. Additionally, no penalties or fines will be imposed on US citizens or “domestic reporting companies” (or their “beneficial owners”) in connection with BOI reporting. FinCEN also intends to issue a new reporting rule later this year – including an interim rule in the coming weeks to extend reporting deadlines – that may significantly change current reporting obligations. These latest announcements provide some certainty regarding FinCEN’s approach to penalties and fines for failing to file BOI reports and its intent to change the current reporting rules.
Corporate Transparency Act Update: Reporting Obligations Reinstated (2/19/25): On February 18, 2025, the US District Court for the Eastern District of Texas in Smith v. US Department of the Treasury, No. 6:24-cv-336-JDK, entered an order staying (pausing) the nationwide preliminary injunction against enforcement of the Beneficial Ownership Information Reporting Requirements final rule (31 C.F.R. 1010.380) (Reporting Rule) promulgated under the Corporate Transparency Act (CTA) (31 U.S.C. § 5336). Prior to this order, enforcement of the CTA and the Reporting Rule was on hold. On February 18, 2025, in light of this order, the Financial Crimes Enforcement Network (FinCEN) issued a notice that beneficial ownership information (BOI) reporting requirements under the CTA are once again back in effect.
Corporate Transparency Act: Nationwide Injunction Continues (1/24/25): On January 24, 2025, a day after the US Supreme Court stayed a nationwide injunction against enforcing the Corporate Transparency Act (CTA), the Financial Crimes Enforcement Network (FinCEN) issued an alert that, in light of a separate court order issued on January 7, 2025, reporting companies are still not required to file beneficial ownership information reports (BOIRs) with FinCEN. While the January 7 order in the case of Smith v. US Department of Treasury remains in effect, reporting companies are not required to file BOIRs with FinCEN and are not subject to liability if they fail to do so while the order remains in force.
Fifth Circuit Reinstates Nationwide Injunction Against Enforcement of the CTA (12/27/24): On December 26, 2024, in response to an emergency motion for rehearing filed by plaintiffs, the US Court of Appeals for the Fifth Circuit reinstated the nationwide preliminary injunction against enforcement of the Corporate Transparency Act (CTA) (31 U.S.C. § 5336) and the Beneficial Ownership Information Reporting Requirements final rule (Final Rule) promulgated thereunder (31 C.F.R. 1010.380).
Corporate Transparency Act Update: Nationwide Injunction Stayed; Deadlines Extended (12/26/24): On December 23, 2024, in response to an emergency motion by the US Department of Justice, the US Court of Appeals for the Fifth Circuit stayed the nationwide preliminary injunction against enforcement of the Corporate Transparency Act (CTA) (31 U.S.C. § 5336) and the Beneficial Ownership Information Reporting Requirements final rule (Final Rule) promulgated thereunder (31 C.F.R. 1010.380), which was entered by the US District Court for the Eastern District of Texas on December 3, 2024, in Texas Top Cop Shop, Inc., et al. v. Garland, No. 4:24-cv-00478 (E.D. Tex).
Corporate Transparency Act: What to Know (12/18/23): The CTA introduces beneficial ownership reporting requirements effective January 1, 2024, for new and existing companies. This article outlines the new reporting obligations imposed by the CTA.
Understanding the Corporate Transparency Act’s Company Reporting Obligations (10/16/23): Starting January 1, 2024, the CTA will mandate all new companies formed or qualified to do business in the United States (and by January 1, 2025, all companies formed or qualified to do business in the US prior to January 1, 2024) to report beneficial ownership information (BOI) to FinCEN. The CTA will require companies to report BOI unless they fit within defined exemptions. This article outlines which companies are impacted, what information they must report, the penalties for failing to report and other guidance related to the CTA.
Unpacking CTA Disclosure Complexity with Private Trust Companies (9/8/23): Most family-owned entities will need to comply with beneficial ownership information reporting requirements under the CTA. In this Bloomberg Tax article, McDermott lawyers Harry Dao and Elise McGee examine whether a private trust company (PTC) can help lessen the disclosure burden under the CTA, analyzing whether a PTC can qualify for a CTA exemption and whether an entity owned by one or more trusts of which the PTC serves as a fiduciary can qualify for a CTA exemption.
FinCEN Seeks Guidance on Applying CTA Reporting Obligations to Trusts and Estates (1/10/22): The CTA is expected to impose reporting obligations on certain types of trusts and various individuals related to trusts; however, it does not explicitly address many types of trusts commonly used in US estate planning. In response, FinCEN released proposed regulations governing the CTA and has requested comment on how to apply the proposed regulations to certain kinds of trusts. This article provides a glimpse into how the CTA may apply to trusts and details timing and penalties for reporting to FinCEN.
FinCEN Announces Anti-Money Laundering Priorities (7/16/21): FinCEN issued its government-wide anti-money laundering (AML) and countering the financing of terrorism (CFT) priorities in June 2021. The AML/CFT priorities demonstrate that the Biden administration considers enhanced AML requirements, regulations and enforcement to be key components of its criminal and civil enforcement efforts, and important tools to address many of the broader issues confronting the US and the international community. This article explores how these priorities may impact companies and details the steps companies should take now to prepare for enhanced AML regulations and enforcement activity.
President Biden Elevates Anticorruption Enforcement (6/7/21): President Biden’s memorandum on Establishing the Fight Against Corruption as a Core United States National Security Interest ushers in a new era of collaboration between federal agencies and establishes a whole-of-government approach to fighting global corruption in furtherance of the national security interests of the US. This article outlines the steps companies should take to position themselves in this new era of compliance.
The Corporate Transparency Act: New Beneficial Ownership Reporting Requirements (2/12/21): On January 1, 2021, the US Congress passed the National Defense Authorization Act (NDAA). Found within the NDAA is the CTA, which will require corporations, limited liability companies and other similar entities to disclose BOI to FinCEN. Companies should carefully review the CTA to determine whether they are “reporting companies” and evaluate their potential obligations under the forthcoming regulations.
Congress Passes the Corporate Transparency Act—Overriding Presidential Veto (12/15/20): On December 11, 2020, and by a veto-proof majority, the US Senate joined the US House of Representative in passing the NDAA for Fiscal Year 2021, which includes the CTA. The CTA requires a report to be filed with FinCEN that identifies each beneficial owner of an applicant forming a reporting company. While questions remain as to the full implications of the Act, it represents an important step in the right direction for the United States in the battle against money laundering and terrorist financing.
Webinars
Reporting for Duty: Preparing for the Corporate Transparency Act (7/25/23): This webinar explores the changes introduced under the CTA and their impact on family offices, including new reporting and disclosure requirements. Click the link above to read the key takeaways, watch the webinar replay and download the slides.
Resources
- FinCEN’s Beneficial Ownership Information Reporting homepage, offering guidance and educational materials
- FinCEN’s Reference Material, featuring rules and regulations related to the CTA
- FinCEN’s Small Entity Compliance Guide, intended to assist the small business community in complying with the beneficial ownership information reporting rule
- FinCEN Identifier Application
- FinCEN Beneficial Owner Reports