February 24th, 2025
Updated Alert: CTA Enforcement Halted
Posted in: Business Law Tagged: Andrew L. Schwartz, Karen N. Shapiro
Author: Karen N. Shapiro, Andrew L. Schwartz
March 26, 2025 update: As of March 26, 2025, FinCEN issued an interim final rule exempting all U.S.-formed (domestic) entities from BOI reporting requirements. Only foreign reporting companies registered to do business in a U.S. state or tribal jurisdiction before March 26, 2025 are required to file BOI reports, with a deadline of April 25, 2025. Further guidance will be forthcoming.
The Corporate Transparency Act (CTA) is once again back in effect following a decision by the District Court for the Eastern District of Texas. Understanding your CTA obligations and BOI reporting requirements is essential for business compliance.
Current BOI Reporting Deadlines
Only foreign reporting companies (entities formed under the law of a foreign country and registered to do business in a U.S. state or tribal jurisdiction) that were registered to do business in a U.S. state or tribal jurisdiction before March 26, 2025 must file BOI reports by April 25, 2025. U.S.-formed domestic entities are exempt under the March 26, 2025 interim final rule.
Non-exempt foreign reporting companies formed on or after March 26, 2025 have 30 calendar days from the date their registration is effective to file their BOI reports, unless they otherwise qualify for a later deadline such as a disaster relief extension. Domestic entities created in the United States are exempt from BOI reporting requirements.
What Is the Corporate Transparency Act?
The Corporate Transparency Act requires certain foreign entities (those formed under the law of a foreign country and registered to do business in a U.S. state or tribal jurisdiction) to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). The law aims to increase corporate transparency and prevent the misuse of shell companies for illicit activities such as money laundering and tax evasion.
A beneficial owner is generally defined as any individual who exercises substantial control over a reporting company or owns or controls at least 25% of the ownership interests of the entity. Reporting companies must file beneficial ownership information including names, dates of birth, addresses, and identification documents for each beneficial owner.
Ongoing FinCEN Guidance
FinCEN may issue additional reporting deadline extensions or other guidance relating to BOI reporting. Business owners should monitor updates from FinCEN and consult with a business law attorney to ensure compliance with evolving CTA obligations and beneficial ownership information reporting requirements.
How Stein Sperling Can Assist
Stein Sperling is available to assist you in determining your CTA obligations or filing such reports on your behalf. Please contact us at 301-340-2020 and ask for a member of the Business Department.
