On February 18, a federal court lifted the remaining injunction blocking enforcement of the Corporate Transparency Act (“CTA”), previously discussed in our prior alerts.
CTA Update: U.S. Companies Off the Hook, Foreign Companies Still Required to Comply
On March 21, 2025, the Financial Crimes Enforcement Network (“FinCEN”), the entity charged with implementing and enforcing the Corporate Transparency Act (“CTA”), issued an interim final rule that significantly changes CTA reporting requirements (the “Rule”). The Rule removes the obligation for U.S. companies and U.S. persons to report beneficial ownership information (“BOI”). Now, only foreign entities registered to do business in the U.S. must comply, but they are not required to report U.S. persons as beneficial owners.
Key Updates:
- Exemption for U.S. Companies: Domestic (U.S.) companies are now fully exempt from all BOI reporting, including the filing of initial, updated or corrected reports.
- Foreign Companies: Foreign (non-U.S.) companies must still file BOI reports, but are exempt from disclosing U.S. person as beneficial owners. U.S. persons are also exempt from reporting their BOI to foreign companies.
- Foreign Pooled Investment Vehicles: Only need to report non-U.S. individuals who exercise substantial control, and if multiple individuals qualify, only the one with the greatest authority must be reported.
- Deadlines: Foreign entities registered in the U.S. before March 21, 2025, must file BOI reports within 30 days from that date. Those foreign entities registering in the U.S. after March 21, 2025 must file their BOI report within 30 days of their registration becoming effective.
- Next Steps: Public comments on the Rule are being accepted for 60 days from March 21st, 2025 before a final rule is issued later this year.
Attorney Gordon W. Prince is a member of the Business Law Department at Gawthrop Greenwood, PC, where he focuses his practice on business and corporate law, contracts, financing and secured transactions. He was named to Best Lawyers®: Ones to Watch, Super Lawyers Rising Star, as well as Top Lawyers in Main Line Today and the Daily Local News. For more information, contact Gordon at gprince@gawthrop.com or 610-696-8225.
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