“A victory for common sense” according to the U.S. Secretary of the Treasury, Soctt Bessent. The United States Department of Treasury and the Financial Crimes Enforcement Network (FinCEN) have announced substantial changes to the Corporate Transparency Act (CTA) in favor of United States citizens and small businesses.
Background
The Corporate Transparency Act (CTA) was introduced to enhance corporate transparency by mandating certain entities to report detailed ownership information to the Financial Crimes Enforcement Network (FinCEN).
There has been a whirlwind of controversy and litigation surrounding the CTA in recent months. Business owners have been tossed back and forth between enforcement of the CTA and unconstitutionality of the CTA. More changes have entered the scene in March.
The Latest Update
On March 2, 2025, the United States Department of Treasury announced that it will not be enforcing any penalties or fines associated with the CTA now, or in the future.
On March 21, 2025, FinCEN issued an interim final rule wherein the requirement to file for U.S. Companies and U.S. persons was lifted. The definition of “reporting company” was amended to mean only 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 (formerly known as “foreign reporting companies”). Entities previously known as “domestic reporting companies” are also now exempt from complying with the CTA.
For any foreign entities required to report under the CTA, they have thirty (30) days from March 21, 2025 or thirty (30) days from the date they receive notice that they are registered to do business in the United States to file an initial Beneficial Ownership Information Report in compliance with the CTA.
While the interim rule has been published, the final rule has not.
What’s Next?
In light of the interim rule and announcement by the Department of Treasury, Adams & Sullivan is currently suspending filing Beneficial Ownership Information Reports in compliance with the CTA.
While the circumstances surrounding the CTA have been unstable at best, this can be the unfortunate reality of new laws. Adams & Sullivan shares your frustration with for the volatility of the legal landscape surrounding the CTA but guarantees to remain vigilant in monitoring future updates.