Client Alert: Interim Final Rule Seeks to Amend Corporate Transparency Act Reporting Requirements
On March 21, 2025, the U.S. Financial Crimes Enforcement Network (“FinCEN”) issued an interim final rule eliminating requirements for U.S. companies and persons to report beneficial ownership information under the Corporate Transparency Act (“CTA”). The announcement comes on the heels of an earlier proclamation issued by the U.S. Department of the Treasury on March 2, 2025 to the same effect.
Under the interim final rule, the definition of “reporting companies” required to file beneficial ownership information reports under CTA regulations is amended to cover only those entities formed under the laws of a foreign country that have registered to do business in any U.S. State or Tribal jurisdiction. As justification for restricting the definition of “reporting companies,” FinCEN asserts that requiring U.S. companies to file beneficial ownership information reports: (i) would not serve the public interest; and (ii) would not be highly useful in national security, intelligence, and law enforcement agency efforts to detect, prevent, or prosecute money laundering, the financing of terrorism, proliferation finance, serious tax fraud, or other crimes. The interim final rule also exempts entities from reporting beneficial ownership information for any beneficial owners who are U.S. persons, and similarly exempts U.S. persons from reporting beneficial ownership information in connection with any entity for which they are a beneficial owner.
The interim final rule was officially published in the Federal Register on March 26, 2025. Following publication of the interim final rule, the following filing deadlines are currently in effect for foreign entities that qualify as reporting companies:
- Those entities registered to do business in the U.S. prior to the date of publication of the interim final rule must file beneficial ownership information reports no later than 30 days from the publication date (i.e. April 25, 2025).
- Entities registered to do business in the U.S. on or after the date of publication of the interim final rule will have 30 calendar days to file an initial beneficial ownership information report after receiving notice that their registration is effective.
FinCEN will be accepting comments on the interim final rule to assess the proposed exemptions and intends to issue a final rule later in the year.
What This Means for Businesses
With the issuance of the interim final rule, all U.S. persons and domestic business entities are effectively excused from their compliance obligations under the CTA’s reporting rule. For U.S. businesses, this means a suspension of all obligations relating to the filing of any initial, updated or corrected beneficial ownership information reports. While foreign business entities meeting the definition of a “reporting company” are still required to submit beneficial ownership information reports, such entities are permitted to exclude any and all U.S. persons from the scope of such reports.
The interim final rule does not otherwise discuss treatment of beneficial ownership information reports previously submitted on behalf of U.S. businesses and individuals. Such reports will continue to be stored within FinCEN’s secure, non-public database unless and until such time as the agency has provided a mechanism for U.S. entities or individuals to retract or remove them (a measure which, as of yet, has not been proposed or adopted by FinCEN or the Treasury Department).
It is worth noting that while the interim final rule purports to amend the definition of a “reporting company” in the regulations promulgated by FinCEN, the interim final rule does not (and cannot) amend the statutory definition of “reporting company” set forth in the CTA itself, as this would require an act of Congress. Given that the CTA’s statutory definition of a “reporting company” continues to encompass most domestic business entities, there is a question as to whether the interim final rule can completely eliminate reporting requirements for U.S. businesses without corresponding amendments to the statute.
Some legal experts and proponents of the CTA have also expressed skepticism regarding the justifications proffered by FinCEN in support of the interim final rule. Specifically, they assert that the elimination of reporting requirements for U.S. persons and businesses would create a sizeable “gap” in the information available to national security, intelligence, and law enforcement agencies which would significantly undermine efforts to detect, prevent, or prosecute money laundering, the financing of terrorism, proliferation finance, serious tax fraud, or other crimes.
Ultimately, it remains to be seen how the interim final rule will be influenced and modified through the public commenting process. For now, companies should continue to closely monitor developments in CTA rulemaking and enforcement and should remain prepared to file their reports in case of further changes in circumstances.
If you have any questions regarding compliance under the Corporate Transparency Act or require assistance in meeting reporting obligations, please contact Brian W. Bisignani, Chair of the Firm’s Bankruptcy & Creditors’ Rights Practice Group, Ryan W. Morris of the Firm’s Corporate Practice Group, or the lawyer at the Firm with whom you regularly consult.
About the Authors
Brian W. Bisignani is a Principal and Chair of the Firm's Bankruptcy & Creditors' Rights Group. His practice encompasses the areas of business reorganizations and financial restructurings, commercial bankruptcy law and litigation, commercial loan restructurings, and corporate and business law.
Ryan W. Morris is an Associate in the firm's Corporate Practice Group. He concentrates his practice in the areas of business and corporate law, with an emphasis on assisting clients with matters related to entity formation and governance, regulatory compliance, corporate transactions, and general business counseling. As part of his practice, Mr. Morris routinely reviews, drafts and negotiates complex commercial contracts and agreements, and advises businesses on long-term strategies for the development and protection of their intellectual property and branding through the use of copyrights, trademarks, and trade secrets. Mr. Morris's clients include both public and privately-held for-profit companies and nonprofit organizations of varying sizes, with operations spanning multiple industries, including health care, banking and financial services, retail and hospitality, manufacturing, construction, transportation, consulting, and professional services.