We have written about several updates to the Corporate Transparency Act as federal court rulings have affected its status over the last year. You may have seen reports that enforcement of the Corporate Transparency Act was set to begin on March 21, 2025. However, on March 2, 2025, the U.S. Treasury Department announced that it will not be implementing the March 21 reporting deadline. On March 21, 2025, the Treasury Department issued an interim final rule that exempts U.S. companies and persons from the Corporate Transparency Act’s requirements. Read on to learn more.  

Enacted in January 2021 to help fight crime including money laundering and fraud, the Corporate Transparency Act (“CTA”) is a federal law that aims to increase transparency around foreign companies that do business in the United States. This goal is achieved by requiring that foreign companies submit information about the company and its ownership to the U.S. government. The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is responsible for enforcing the CTA.

As the Act was originally written, it applied broadly to most American corporations, LLCs, and “other similar entities,” including most privately-owned real estate companies. However, the Treasury Department announced on March 2, 2025 that U.S. citizens and domestic companies would be exempt from the CTA’s requirements.

On March 21, 2025, the Treasury issued an interim final rule that requires reporting by all entities that are 1) formed under the laws of a country other than the U.S. and 2) registered to do business in the U.S. It is important to note that the March 21, 2025 rule is an interim rule, subject to public comment, and that a final rule will be issued at a later date.

The CTA includes the “Beneficial Owners Rule,” which requires that reporting companies provide information about both the company itself and its owners to FinCEN. Companies subject to the Beneficial Owner Rule must provide the following information:

• full business name
• all trade and “doing business as” names
• the address of the company’s principal place of business
• the jurisdiction where the business was formed or registered
• the business’ Taxpayer Identification Number

The Beneficial Owner Rule also requires reporting companies to provide information about the people who “beneficially own” and/ or “substantially control” the business. The law defines beneficial owners as those who own or control at least 25% of the ownership interests in the company or “substantially control” its business operations. Senior officers, such as general counsel, CFOs, COOs, CEOs, and Presidents, are automatically assumed to have “substantial control” over the companies they work for.

Additionally, any person who has “any other form of substantial control,” such as the authority to appoint or remove officers or decision-making power over significant matters, must be reported to FinCEN. Finally, reporting companies created on or after January 1, 2024 must also report information about the “company applicant,” which is the person(s) who handles the registration and filing of the company.

The Beneficial Owner Rule requires the following information about the company’s owner(s) to be reported:

• full legal name
• date of birth
• residential address (P.O. boxes are not permitted)

Additionally, the beneficial owner(s) will be required to submit “an identifying number from an acceptable identification document such as a passport or U.S. driver’s license, and the name of the issuing state or jurisdiction.”^[1]Beneficial owners who are concerned about data privacy can report their information to FinCEN directly, rather than to the reporting company.^[2]

Failure to report as required (including amendments, as necessary) carries both civil penalties, including $591 per day in fines, and the possibility of criminal prosecution. However, as a reminder, the Treasury Department has stated that it will not be enforcing these regulations against U.S. citizens or domestic companies, but instead will enact rules that narrow the CTA’s scope to apply only to foreign entities.  

As noted above, the CTA is not being enforced against U.S. citizens or domestic companies. Foreign entities that became a reporting company before March 26, 2025 are required to file an initial report no later than April 25, 2025. Foreign entities that became a reporting company on or after March 26, 2025 will be required to file within 30 days of either 1) receiving actual notice that it is registered to do business in the U.S. or 2) such notice being posted on a publicly available forum, whichever comes first.

I am a broker or owner of an existing real estate company in Alabama – does this law apply to me?  

• No. U.S. companies and U.S. citizens are exempt from the CTA.

If own multiple companies, does the CTA require me to file separately for each?

• Yes. Beneficial owners will have to file a separate report for each of their companies that is covered by the CTA.

Is this a one-time registration?

• No, the law imposes an ongoing duty to report. After the initial registration, the CTA requires that companies report any changes in ownership to FinCEN within 30 days of the change occurring. Additionally, companies will be required to timely correct any errors in reports submitted.  (As a reminder, this requirement does not apply to U.S. companies or citizens.)

What does FinCEN cost to file?

• FinCEN does not charge a fee for filing under the Corporate Transparency Act.

How do I report my company/ beneficial owner information?

• Reporting companies can submit their filing to FinCEN using the form found here.  

NOTE: Additional guidance can be found at https://www.fincen.gov/boi-faqs#A_1. Frequently Asked Questions regarding the March 21, 2025 interim final rule can be found at https://fincen.gov/boi/ifr-qa