Beneficial Ownership Reporting Changes & Reporting Under The Corporate Transparency Act

In 2023, The U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN) introduced corporate reporting requirements that were planned to come into effect in 2024. After a significant number of changes and court challenges, it seems the law is settled, and U.S.-formed entities do not have reporting obligations. We’re covering what’s happened and what your next steps are in this post.   

What’s The Corporate Transparency Act?  

The Corporate Transparency Act (CTA) is the U.S. beneficial ownership reporting law. Beneficial ownership reporting laws are rapidly being introduced around the world to shed light on who owns which companies. These laws are designed to reduce illegal tax evasion, as well as money laundering and financing terrorism.     

Timeline of the Corporate Transparency Act in the U.S. 

The CTA faced numerous legal challenges across the country after being introduced. Corporations in the U.S. were subjected to on-again-off-again requirements throughout 2024, before the regulations were significantly amended and finalized earlier this year.  

Here’s a timeline of the developments: 

2021: The Corporate Transparency Act (CTA) was enacted as part of the National Defense Authorization Act for Fiscal Year 2021.  

September 2022: FinCEN published the final rule implementing the CTA’s BOI reporting requirements. 

November 29, 2023: FinCEN extended the initial reporting deadline for entities created or registered in 2024 from 30 days to 90 days. 

January 1, 2024: Beneficial ownership reporting under the CTA requirements went into effect. 

• Existing Reporting Companies (created/registered before Jan 1, 2024): Original deadline to file initial BOI reports was January 1, 2025. 

• New Reporting Companies (created/registered on/after Jan 1, 2024, and before Jan 1, 2025): Had 90 calendar days to file initial BOI reports after receiving notice of creation/registration. 

• Companies created/registered on or after January 1, 2025: Original deadline of 30 days to file initial BOI reports. 

• Updates/Corrections: Generally due within 30 days of a change or discovery of an inaccuracy. 

Court Challenges and Shifting Deadlines

December 3, 2024: In Texas Top Cop Shop, Inc. v Garland (Texas Top Cop Shop), a U.S. District Court issued a sweeping nationwide preliminary injunction halting the CTA’s reporting requirements, pending the lawsuit regarding its constitutionality. This meant FinCEN was prohibited from enforcing the CTA from January 1, 2025 as was originally enacted. 

December 10, 2024: FinCEN announced that companies were not subject to liability for not filing by January 1, 2025, due to the pending Texas Cop Shop ruling. 

December 23, 2024: The government appealed the Texas Top Cop Shop ruling, and the Fifth Circuit Court of Appeals granted an emergency motion, lifting the nationwide injunction. FinCEN was again allowed to enforce the CTA and extended the general deadline for most filers to January 13, 2025. 

December 26, 2024: The Fifth Circuit vacated its own stay, reinstating the preliminary injunction. This again prohibited FinCEN from enforcing the CTA. 

January 7, 2025: In Smith v. U.S. Department of the Treasury (Eastern District of Texas), a different federal district court judge issued another nationwide injunction, further pausing the CTA’s enforcement. 

January 23, 2025: The U.S. Supreme Court granted the government’s motion to stay (lift) the nationwide preliminary injunction issued in the Texas Top Cop Shop case. This meant FinCEN was technically allowed to enforce the CTA again based on this specific case. 

January 24, 2025: Despite the Supreme Court’s action in Texas Top Cop Shop, FinCEN stated that reporting companies were not currently required to file due to the separate Smith injunction remaining in effect. FinCEN continued to accept voluntary submissions. 

February 18, 2025: The judge in the Smith case issued a stay of his January decision, effectively lifting the preliminary injunction. This removed a significant roadblock to CTA enforcement. 

February 19, 2025: FinCEN established a new deadline for initial BOI reports: March 21, 2025, for most companies. 

February 27, 2025: FinCEN announced it would not impose fines, penalties, or other enforcement actions against companies failing to file or update BOI reports by the March 21, 2025 deadline. They also indicated an interim final rule would be issued to extend deadlines. 

March 2, 2025: The U.S. Department of the Treasury issued a statement confirming that it would not enforce penalties or fines against U.S. citizens, domestic reporting companies, or their beneficial owners after forthcoming rule changes. 

March 21, 2025: This was the deadline for most reporting companies to file their initial BOI reports. However, FinCEN had already stated they would not enforce penalties by this date. 

March 21, 2025 (FinCEN Interim Final Rule): FinCEN issued an interim final rule that significantly changed the scope of the CTA. This rule removed the requirement for U.S.-formed entities (domestic reporting companies) and U.S. persons to report beneficial ownership information (BOI) to FinCEN. This exemption extends to entities ultimately owned or controlled by non-U.S. companies or persons if the U.S. entity itself is a domestic reporting company. 

March 26, 2025: The interim final rule was formally published in the Federal Register. It contained a new definition of a reporting company and updated deadlines.  

Current Status of the Corporate Transparency Act Reporting Requirements  

As it currently stands, U.S.-formed entities are generally not required to report beneficial ownership to FinCEN. Only foreign reporting companies registered to do business in the U.S. still have reporting obligations, with the specified deadlines.   

Those foreign reporting companies registered to do business in the U.S. prior to March 21, 2025 were required to register their beneficial owners with FinCEN by April 21, 2025. New foreign reporting companies (that registered to do business in the U.S. after March 21, 2025) must file BOI reports no later than 30 days from that date.  

Who Needs To Report Under The CTA  

The new definition of “Reporting Company” primarily applies to entities formed under the law of a foreign country that are registered to do business in any U.S. State or tribal jurisdiction. It does not apply to entities controlled by foreign individuals if the corporation is formed in the U.S.  

Exempt Entities Under The CTA 

Even for foreign companies that are registered to do business in the U.S., there are still 23 categories of entities that are exempt from the reporting requirements. These exemptions generally apply to entities that are already subject to significant federal or state regulation and already provide beneficial ownership information to a governmental authority, including certain publicly traded companies, non-profits, and certain large operating companies. The 23 categories of entities that are exempt include: 

• Securities reporting issuer 

• Governmental authority 

• Bank 

• Credit union 

• Depository institution holding company 

• Money services business 

• Broker or dealer in securities 

• Securities exchange or clearing agency 

• Other Exchange Act registered entity 

• Investment company or investment adviser 

• Venture capital fund adviser 

• Insurance company 

• State-licensed insurance producer 

• Commodity Exchange Act registered entity 

• Accounting firm 

• Public utility 

• Financial market utility 

• Pooled investment vehicle 

• Tax-exempt entity 

• Entity assisting a tax-exempt entity 

• Large operating company 

• Subsidiary of certain exempt entities 

• Inactive entity 

Next Steps For Business Leaders  

At this point, we believe that the CTA saga is concluded and, unless your business is a foreign entity registered to do business in the U.S., you will not need to complete any reporting obligations.  

However, there are multiple remaining legal challenges still lingering in U.S. courts and the interim rule that requires foreign entities to report beneficial ownership was also open for comment through to May 21, 2025. In other words, there may be further changes to the law in the future. But the volume of entities these changes now impact will be significantly lower than the initial scope of the law.  

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