After much litigation surrounding the Federal Corporate Transparency Act (“CTA”) and enforcement of the CTA by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”), the U.S. Treasury Department announced the suspension of CTA enforcement against U.S. citizens and domestic reporting companies. A proposed interim final rule (“Proposed Rule”) is currently under a notice and comment period that is set to end May 27, 2025. Following the notice and comment period, FinCEN will review the submissions and develop new regulations.
The Proposed Rule exempts all domestic companies from the CTA reporting requirements. Foreign companies are still required to report their beneficial ownership information. However, under the Proposed Rule, foreign companies are exempt from reporting information on beneficial owners that are U.S. citizens. Thus, foreign companies that only have beneficial owners that are U.S. citizens would also be exempt from the reporting requirements.
FinCEN has announced it intends to issue a new final rule in 2025. We will provide further updates on the new rulemaking requirements from FinCEN when available.
These changes to the Federal CTA do not affect any similar state corporate transparency laws. New York’s LLC Transparency Act (the “NY Act”) requires the disclosure of beneficial ownership information to the New York Department of State by limited liability companies formed under the laws of the state of New York and foreign limited liability companies authorized to do business in the state of New York. The NY Act is largely based on the CTA and currently is set to go into effect on January 1, 2026. We will provide further updates on the NY Act when available.
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