April 28, 2025

By: James T. Walther, Esq., LL.M.
General Counsel

The Financial Crimes Enforcement Network (FinCEN) has issued an interim final rule (March 25, 2025) significantly narrowing the scope of reporting obligations under the Corporate Transparency Act (CTA). A comment period is now open with respect to the Final Rule. The major change is a revision to the definition of “Reporting Company” under prior regulations. Per the new definition, domestic companies formed under state law in the United States are no longer considered a Reporting Company subject to BOI. After months of legal uncertainty and shifting deadlines, these changes simplify compliance obligations for many businesses. Ultimately, FinCEN decided to relieve the administrative headache that affected almost every US business entity until it assesses how to administer a fair and clear reporting process. Check out our previous articles for background regarding how CTA compliance was a burden and a moving target for many small and large businesses alike.

What’s Changed

1. U.S. Companies Exempt from Reporting

FinCEN revised the final definition of Under the new rule, U.S.-formed entities are no longer required to report or update Beneficial Ownership Information (BOI). This is a substantial rollback of previous CTA requirements and removes a major compliance burden for domestic companies.

2. Reporting Now Applies Only to Foreign Entities

The CTA now applies solely to foreign entities registered to do business in the U.S., and only in relation to their non-U.S. beneficial owners:

• • Foreign entities registered before March 25, 2025, must file BOI reports by April 24,
  • Those registered on or after March 25, 2025, must file within 30 days of their effective registration

3. Temporary Suspension of Enforcement

FinCEN has announced that it will not impose penalties or fines in connection with BOI reporting deadlines during the current transition period.

What You Should Do

• U.S. Formed Entities: No BOI reporting is currently required regardless of when they are formed.
• Foreign Reporting Companies: Review your entity’s registration date and ensure you meet the applicable 30-day filing deadline.

Practical Implications

• Reduced Compliance Burden: U.S. companies no longer need to track or report BOI under the CTA.
• Narrowed Focus: Regulatory scrutiny is now aimed primarily at foreign reporting companies and non-U.S. owners.
• Increased Clarity: The revised rules simplify obligations and timelines for This will in the interim help prevent waste, which was a significant concern as many different types of businesses spent hours of administrative time or hired professionals to assist them in meeting filing requirements.
• Ongoing Questions: The narrowed scope may raise concerns about transparency gaps or new avenues for avoidance using domestic entities. LLCs and other entities are creatures of state law. States are just coming around to enhanced disclosure of individuals involved with business entities.

We are monitoring this evolving area closely and will continue to provide updates as FinCEN releases additional guidance. Current official statements from FinCEN can be found on FinCEN’s official website.  We highly recommend that professionals and business owners monitor any new developments directly through FinCEN as our articles may not reflect the most up to date requirements.

Timeline of Recent Developments

• February 17, 2025, The court in Smith v. U.S. Treasury lifts the preliminary injunction, allowing FinCEN to resume enforcement.
• February 19, 2025, FinCEN announces that BOI reporting requirements are back in effect. Reports are due March 21, 2025.
• February 27, 2025, FinCEN issues a statement clarifying it will not assess penalties for missed BOI reporting deadlines and that it is working on a new rule making process to be issued on or about March 21,2025.
• March 21, 2025, FinCEN issues the interim final rule, formally exempting U.S. entities and updating reporting timelines for foreign entities