On Aug. 11, FinCEN issued a final rule permanently removing the requirement for U.S. citizens and companies to report beneficial ownership information under the Corporate Transparency Act (CTA).

In 2021, Congress enacted the CTA as part of the Anti Money Laundering Act of 2020. In pertinent part, the CTA sought to require many domestic business entities, including corporations and limited liability companies, to file reports to the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) disclosing the identity of all beneficial owners who own or control a covered entity. The reporting rule was codified as 31 CFR 1010.380, 31 U.S.C. 5336(b).

As originally conceived, the CTA would have required millions of businesses to obtain a unique FinCEN identifying number, file annual reports (and periodically correct and update those reports) disclosing, among other things, every beneficial owner’s full legal name, date of birth, complete and current address, and unique identifying numbers from a valid U.S. or foreign passport, state identification, or state driver’s license. Failure to comply would have resulted in civil and criminal penalties. Litigants challenged the reporting requirements, resulting in an extension and, ultimately, the suspension of the requirements as applied to U.S. citizens and domestic reporting companies.

Partially in response to the ongoing litigation, FinCEN issued an interim final rule on March 26, 2025. The interim rule created two exemptions to the reporting requirement, the first exempting all entities previously defined as domestic reporting companies (and their beneficial owners), and the second exempting foreign reporting companies from having to report beneficial ownership information of any U.S. persons who are beneficial owners (and the inverse, exempting U.S. persons from having to provide information to the foreign reporting companies for which they are a beneficial owner). Related to the second exemption, FinCEN also amended the special rule concerning foreign pooled investment vehicles, no longer requiring such entities to report information about U.S. persons who exercise substantial control.

The final rule, adopted Aug. 11, permanently modifies the CTA and concretizes the exceptions created in the interim rule with two modifications: (1) the exemption eliminating the requirement for foreign reporting companies to report information about a U.S. person now applies to both U.S. beneficial owners and U.S. company applicants (and the provision itself is codified differently); and (2) U.S. persons are no longer required to update or correct information previously provided in connection with obtaining a FinCEN ID.

A copy of the final rule is available here.

For questions about the CTA or other legal or regulatory matters, please contact a Taft attorney.