Over the last one and a half years, business owners have faced regularly changing information regarding whether they were required to comply with the Federal Corporate Transparency Act (the “CTA”) and disclose their beneficial owners. Our firm published its first post on the CTA on February 29, 2024. Since then, we’ve published numerous updates that can be found here and here. Since our most recent post, the Financial Crimes Enforcement Network, or FinCEN, has published an interim final rule revising the definition of “reporting company.”
What Does the Interim Final Rule Say?
Originally, the CTA required that all corporations and limited liability companies (with certain limited exceptions) provide beneficial ownership information (BOI) to FinCEN. The new rule limits the law to foreign businesses. It states that only entities formed under the law of a foreign country registered to do business in any U.S. State or tribal jurisdiction are subject to the reporting requirements of the CTA. Furthermore, these reporting companies do not have to report the beneficial ownership information of “U.S. persons.” As of yet, it is unclear how FinCEN defines the term “U.S. persons,” as it could mean only U.S. citizens or include foreign nationals permanently residing within the U.S. or green card holders.
Notably, this change means that any domestic company formed under the laws of any U.S. State or tribal jurisdiction is now exempt from reporting its beneficial ownership information to FinCEN, regardless of whether its beneficial owners are U.S. persons.
When Do Companies Have to Comply with the CTA?
The deadline for existing reporting companies was extended to April 25, 2025. Any newly formed reporting companies are required to file their initial BOI report within 30 calendar days after receiving notice that their registration is effective.
What About Reporting Under Other Laws?
This new rule by FinCEN does not affect any local jurisdiction’s own reporting requirements, including New York. As such, business owners should consult an attorney to ensure they are in compliance with all laws.
If you would like to find out what the Corporate Transparency Act changes mean for you or your company, please contact one of our trusted attorneys.