On March 21st, 2025, the Financial Crimes Enforcement Network of the Department of Treasury FinCEN) issued an interim final rule removing the requirement for companies formed in the U.S. and U.S. persons to report Beneficial Ownership Information (BOI) under the Corporate Transparency Act (CTA). This interim final rule marks a pivotal change in the compliance landscape for US domestic entities.
Background on the Corporate Transparency Act
Enacted in 2021, the CTA aimed to enhance transparency in entity structures and ownership to combat illicit financial activities such as money laundering and terrorism financing and to make it more difficult for bad actors to hide or benefit through shell companies or other unclear ownership structures. Prior to the interim rule change on March 21st, 2025, the CTA mandated that most all companies—including LLCs and corporations (except for a limited number of exempt organizations)— submit a BOI Report to FinCEN, detailing information about the company's beneficial owners, who are individuals who exercise significant control over the company or own or control at least 25% of the company's ownership interests.
Key Changes Introduced by the Interim Final Rule
The recent interim final rule introduces several important changes:
Redefinition of "Reporting Company": The term now exclusively refers to entities formed under foreign laws that have registered to do business in any U.S. state or tribal jurisdiction. Consequently, domestic entities (those formed in the U.S.) are no longer classified as reporting companies.
Exemption for Domestic Entities: All entities created within the United States, previously termed "domestic reporting companies," along with their beneficial owners, are exempt from BOI reporting requirements.
Continued Obligations for Foreign Entities: Foreign entities meeting the new definition of a reporting company must still report their BOI to FinCEN under the stated deadlines, unless they qualify for an exemption. As of March 21st, 2025, foreign entities required to report their BOI must adhere to the following deadlines:
Foreign entities that meet the definition of a reporting company registered to do business in the United States before March 21st, 2025, must submit their BOI report no later than 30 days after March 21st, 2025.
Foreign entities that meet the definition of a reporting company registered to do business in the United States on or after March 21st, 2025, have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.
For these foreign entities that are required to report their BOI to FinCEN, they are not required to report U.S. persons as beneficial owners. Failure to file, if required, may result in daily penalties or fines.
Implications for Businesses Formed in the U.S.
This interim rule has several implications:
Adjusted Compliance Requirement: Companies formed in the U.S. are relieved from the requirements associated with BOI reporting.
Regulatory Certainty: By narrowing the scope of reporting requirements, domestic entities gain clearer guidance on their obligations, reducing potential legal uncertainties.
Ongoing Monitoring: Despite the current exemption, it is essential for businesses to stay informed about potential future regulatory changes, as FinCEN may revisit these requirements based on public comments and evolving policy considerations. You are encouraged to frequently check the status of these reporting requirements through FinCEN’s landing page here.
For further details and specific information on your situation, you are encouraged to consult the compliance guide furnished by FinCEN, available here, and monitor the FinCEN’s landing page here as updates will be posted via FinCEN.
Archetype Legal PC is also happy to help you understand the implications of these changes, and what you might need to do for your own company to stay compliant. Feel free to reach out to us via hello@archetypelegal.com if there is any assistance we can supply on this matter, or any others.
Disclaimer: This post discusses general legal issues and developments, is intended to serve as informational only, and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction. Archetype Legal PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this post.
