On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule (IFR) that removes the requirement for U.S. entities and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act (CTA).

In the IFR, FinCEN:

  • Revised the definition of “reporting company” 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”).
  • Exempted U.S. entities (previously known as “domestic reporting companies”) from BOI reporting requirements.

Under the IFR, non-U.S. entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the BOI reporting requirements must report to FinCEN under new deadlines, detailed below. However, these foreign entities are not 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.

For nonexempt foreign entities that are reporting companies, the IFR imposes the following deadlines:

  • Nonexempt foreign reporting companies registered to do business in the United States before March 26, 2025 (the date that the IFR was published in the Federal Register) must file BOI reports no later than April 25, 2025.
  • Nonexempt foreign reporting companies registered to do business in the United States on or after March 26, 2025 have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.

FinCEN is accepting comments on the IFR and intends to finalize the IFR later this year. The final rule, which can only be published sometime after the 60-day comment period ends, could be quite different from the current IFR.

Given the ongoing uncertainties surrounding the CTA (including the possibility of challenges to the IFR on grounds that it does not comport with the statute as passed by Congress or otherwise), both U.S. and foreign reporting companies and their U.S. and foreign beneficial owners would be well-advised to continue to closely monitor CTA developments even if they are (for the time being at least) exempt from BOI reporting under the IFR.

Duane Morris is actively monitoring developments regarding the CTA and issuing Alerts on the topic. To receive future Duane Morris Alerts on the CTA, please register for our CTA mailing list.

The Corporate Transparency Act of 2021 (CTA), effective January 1, 2024, introduced new compliance burdens and potential hefty penalties.

This law is a product of the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). The CTA requires Reporting Companies – i.e., most every corporation, partnership, limited liability company or statutory trust formed or created by the filing of documentation with a U.S. state or territorial government and any foreign entity registered with a state or territorial government to do business in that state or territory – to make certain filings about individuals who are “Beneficial Owners” of those entities.

The CTA imposes compliance burdens on Reporting Companies, together with hefty penalties for non-compliance. There are a number of exemptions, but companies need to determine if one of the CTA’s 23 precisely drawn exemptions applies. A failure to comply that is determined to be “willful” might give rise to a criminal fine of as much as $10,000 and imprisonment for up to two years. Even if a criminal charge is avoided, a failure to file may result in a $500 per day civil penalty (as indexed for inflation).

These penalties are the sharp teeth in the CTA’s effort to ferret out persons involved in money laundering and similar activities through the use of shell companies in the U.S.  However, the wide net of the CTA can impact a range of companies – from the smallest of entities used for valid business or investment purposes to the largest of companies.  Even inactive entities can be required to report.   

The CTA requires each Reporting Company (namely, every kind and size of entity that exists on December 31, 2023, which cannot conclude that it qualifies for an exemption) to file with FinCEN information regarding itself and its beneficial owners not later than January 1, 2025. Entities created or first registered on or after January 1, 2024 must file within 90 days following their creation or first registration (the 90-day period is reduced to 30 days for entities formed or first registered in 2025 or beyond). If the information in a filing changes, the affected entity has only 30 days to update its filing.  For current updates to these FinCEN filing deadlines, see headline box above. 

Duane Morris’ CTA Strategy Team

Duane Morris is actively monitoring developments regarding the CTA and issuing Alerts on the topic. To receive future Duane Morris Alerts on the CTA, please register for our CTA mailing list. Duane Morris will provide advice to clients regarding CTA compliance only when explicitly engaged to do so in writing. 

For More Information

For more information, please contact Thomas R. Schmuhl or any of the CTA Strategy Team members referenced in the Attorney Listing.