Corporate Transparency Act Overhauled—Is Your Business Still Affected?

The long-running legal saga surrounding the Corporate Transparency Act (“CTA”) took another dramatic turn on March 21, 2025.  The Financial Crimes Enforcement Network (“FinCEN”)—the agency responsible for implementing the CTA—announced sweeping changes to the manner in which the CTA would be implemented.  To achieve these changes, FinCEN published a new interim final rule, which took effect immediately upon publication.  Under the newly published rule, all domestic entities are exempt from the reach of the law.  The rule also releases both domestic and foreign companies from having to report information about any owners who are citizens or residents of the United States or that are domestic business entities, estates, or trusts.  As revised, in other words, the CTA now applies only to companies that have been formed under the laws of a foreign country—and it only requires those companies to report information about their ownership to the extent those owners are not themselves U.S. citizens, residents, or entities.

For historical context, a bipartisan Congress first enacted the CTA in January 2021, in an effort to counter money laundering, the financing of terrorism, and other illicit activity.  As originally implemented, the CTA would have required most privately held companies in the United States to report to the federal government certain information about the companies themselves, the individuals that own or exercise control over the companies, and the individuals involved in forming or registering the companies to do business in the United States.  Most of these companies would have been required to report this information to FinCEN by January 1, 2025.

In the years since its enactment, the CTA has been the target of frequent court challenges.  In the main, challengers to the CTA have asserted that the law exceeded the federal government’s constitutional powers by imposing requirements on companies based on those companies’ mere existence—their “natural state of being”—rather than purporting to regulate any affirmative actions taken by the companies.  As the calendar turned from 2024 to 2025, within the span of a few months, the CTA was repeatedly enjoined and then un-enjoined by various federal courts.  These rulings created substantial uncertainty for business owners, and FinCEN responded by pushing back any compliance deadlines further into 2025.  As of the date of this writing, all active injunctions against the CTA have been dissolved, and the law is now in effect.

The future of the CTA remains murky.  Court challenges to the law are still pending across the country (though it is now an open question whether some of the issues in those cases have been mooted by the change in guidance).  At the same time, separate bills have been proposed in Congress that either would extend any deadlines for compliance for whatever companies remain subject to the law or would abolish the CTA altogether.  There are also outstanding questions about whether FinCEN’s change in approach will survive future changes in presidential administration, and about whether it can be squared with the language of the CTA as enacted (and, if not, who—if anyone—would have both the incentive and the standing to challenge it).

Yet, for now, the upshot is that most companies that previously were required to comply with the CTA are exempt from that requirement.  If your company was formed and registered to do business in the United States, it no longer needs to file a beneficial ownership report with FinCEN.  And if you are a citizen or resident of the United States, your personal information need not be included on the filings of any company that is still required to report.

Woods Fuller is continuing to monitor future developments concerning the CTA.  If you have any questions, you should contact your Woods Fuller attorney.