Corporate Transparency Act Update: Interim Final Rule Spells End of BOI Reporting for US Companies and Persons

On March 21st, the Treasury Department issued an “Interim Final Rule” that replaces the regulations formerly governing the Corporate Transparency Act.  The Interim Final Rule will be effective when published in the Federal Register.   

As telegraphed in the press release issued on March 2, FinCEN has dramatically scaled back reporting requirements under the CTA: all US companies and persons are exempt from reporting.   This means that companies formed in the U.S. are not required to file a BOI report or update any BOI report previously filed.  Foreign companies that are required to file are not required to file information concerning any U.S. citizens who may be beneficial owners.  The Interim Final Rule also makes clear that FinCEN will not further enforce any actions against US companies or persons under the original regulations. 

As a result of these changes, only foreign companies directly registered to do business in the US must report, and even they do not have to report any US persons who are beneficial owners.  Reports from foreign reporting companies will be due within 30 days of the publication of the Interim Final Report in the Federal Register (for companies already registered) or the effective date of their registration in the United States (for companies that register after the publication of the Interim Final Rule). 

This regulatory action reduces the number of reporting companies (which was expected to be roughly 32 million) to fewer than 100,000.  Although US companies may decide to report voluntarily, the benefits of doing so seem remote, given the breadth of the Interim Final Rule as applied to US companies and persons. 

The Interim Final Rule is subject to a formal period of comment and rulemaking that could bring more changes.  In addition, it will likely be the subject of litigation, since it effectively nullifies a law passed by Congress.   But for the time being, it is clear that the vast majority of businesses formerly subject to the CTA will not be required to file a BOI report or to amend any filings previously made. 

It is worth noting that New York passed its own “transparency act” in 2024 that mimics many of the concepts in the CTA.  This law will take effect January 1, 2026 and require certain LLCs (but not corporations) organized in New York to report beneficial owner information to the state.  It is likely that other states will follow suit in passing such “mini CTAs” applicable to entities formed locally.  Thus, US-organized small businesses should continue to monitor legal developments in the states where they are organized or qualified.