Corporate Transparency Act: Important Updates and What It Means for Your BOI Reporting
The Corporate Transparency Act (CTA) has had an important update, changing which businesses are required to report beneficial ownership information (BOI).
Here’s what’s new and how it impacts you.
What’s Changed?
On March 2, 2025, the U.S. Treasury Department announced that they will not enforce penalties or fines against U.S. citizens, domestic companies, or their beneficial owners for failing to file or update their BOI reports. The latest notice from the Treasury Department indicates that the upcoming proposed rulemaking will narrow the scope of the rule, requiring only foreign reporting companies to file BOI reports.
The new policy represents a significant departure from the previous CTA requirements, which were expected to impact an estimated 32.6 million U.S. businesses. Although domestic U.S. companies (including certain family-owned entities) no longer face penalties for failing to file their BOI reports, it’s important to note that the CTA is still on the books as law. A future administration could choose to reinstate enforcement at any time.
What Does This Mean for You?
If your company is a domestic reporting company, you now have some flexibility regarding your BOI reporting obligations. While the March 21, 2025 deadline previously outlined for filing initial, updated, or corrected reports no longer carries penalties, you may still choose to file voluntarily in order to ensure you remain in compliance with the law, especially if enforcement is reactivated in the future.
For foreign reporting companies, however, the CTA’s original requirements are still in place, and you must continue to adhere to the filing deadlines.
What Is a Reporting Company?
A reporting company is any domestic or foreign entity that was created by filing with the Secretary of State or a similar office. Family-owned entities, such as corporations, LLCs, or family limited partnerships (FLPs), are also considered reporting companies. There are still exemptions, including for banks, credit unions, large public utilities, and tax-exempt organizations.
What Should You Do Now?
If your company is domestic, it’s voluntary to file your BOI report. You don’t face penalties if you miss the March 21, 2025 deadline. If your company is foreign, make sure to file your BOI report by the deadline.
If you have further questions about this process, please don’t hesitate to contact us!
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Corporate Transparency Act: Important Updates and What It Means for Your BOI Reporting
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