Williams | Robinson | Wiggins

What the "Corporate Transparency Act" means to you

Responsibility for reporting most business ownership information to the federal government falls upon financial institutions. Effective January 1, 2024, this obligation was scheduled to rest also with busines owners themselves. Pursuant to the Corporatate Transparency Act of 2019 (the "Act"), business owners must report information to the Financial Crimes Enforcement Network ("FinCEN") of the U.S. Treasury Department. However, the Act had been challenged in court, and on March 26, 2025, FinCEN removed benefial owner reporting requirements for all entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners are now exempt from the requirement to report beneficial ownership information (BOI) to FinCEN. Existing foreign companies that must report their beneficial ownership information have at least an additional 30 days from March 26, 2025—until April 25, 2025, for most companies—to do so. For more information, see press release and alert. Keep reading to learn more.

What is BOI? Beneficial ownership information ("BOI") consists of disclosures about ownership that most business owners were originally required to file with FinCEN under the Act. The information collected was intended to help prevent money laundering, fraud, terrorist activities, and other criminal undertakings.

Has the CTA been challenged in court? Yes, several lawsuuits are winding their way through the courts challenging enforcement of the CTA. In early December (2024), U.S. District Court Judge Amos L. Mazzant preliminarily enjoined the CTA and its implementing regulations. Texas Top Cop Shop, Inc. v. Garland, 2024 WL 4953814 (Dec. 03, 2024). Two days later the Department of Justice filed an appeal with the 5th Circuit Court of Appeals on behalf of the Department of Treasury.

Appeallate court lifts injunction. On Decmber 23, 2024, the 5th Circuit Court of Appeals lifted the injunction previously issued by the lower court. The the court said in its order that "the government has made a strong showing that it is likely to succeed on the merits in defending CTA's constitutionality.""

Appeallate court reinstates injunction. In a dizzying turn of events, on Decmber 26, 2024, the 5th Circuit Court of Appeals reinstated the injunction previously issued by the lower court. In its superceding order, the court stated:

However, in order to preserve the constitutional status quo while the merits panel considers the parties' weighty substantive arguments, that part of the motions-panel order granting the Government's motion to stay the district court's preliminary injunction enjoining enforcement of the CTA and the Reporting Rule is VACATED.

Next, on February 18, 2025, a decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.), set aside a prior stay of BOI reporting requirements under the CTA are once again back in effect. FinCEN soon thereafter set a new deadline of March 21, 2025, to file BOI reports.

FinCEN Responds. On March 2, 2025, the Treasury Department announced that, with respect to the CTA, not only would it not enforce any penalties or fines associated with the BOI reporting rule under the existing regulatory deadlines, but it would further 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 either.

Consistent with the Treasury Department’s March 2, 2025 announcement, FinCEN issued an interim final rule that removes the requirement for U.S. companies and U.S. persons to file BOI reports with FinCEN under the Corporate Transparency Act. In that interim final rule, FinCEN revises the definition of “reporting company” in its implementing regulations to mean 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 (formerly known as “foreign reporting companies”). FinCEN also exempts entities previously known as “domestic reporting companies” from BOI reporting requirements.

Thus, through this interim final rule, all entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners will be exempt from the requirement to report BOI to FinCEN. 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 new deadlines, detailed below. These foreign entities, however, will not be required to report any U.S. persons as beneficial owners, and U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.

Upon the publication of the interim final rule, the following deadlines apply for foreign entities that are reporting companies: Reporting companies registered to do business in the United States before the date of publication of the IFR must file BOI reports no later than 30 days from that date. Reporting companies registered to do business in the United States on or after the date of publication of the IFR have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective. FinCEN is accepting comments on this interim final rule and intends to finalize the rule this year.

Did you know? The above information is presented by Williams | Robinson | Wiggins as a public service and to generally outline the law in a particular area. It is not provided and is not intended as legal advice tailored to you or to your unique situation. Every legal matter depends upon specific facts which an attorney hired by you must consider in forming legal opinions and advice.

Need more information? If you need to file a BOI report, you may contact us at(573) 341-2266 to obtain more detailed assistance.