CTA Update: That’s (Almost) All She Wrote
After repeated back and forth over the five years since it became effective on January 1,2021, the Corporate Transparency Act (“CTA”) saga has reached what appears to be its conclusion—at least for domestic companies and U.S. persons. On August 11, 2025, the Financial Crimes Enforcement Network (“FinCEN”) issued a final rule permanently exempting domestic reporting companies and U.S. persons from the beneficial ownership information (“BOI”) reporting requirements under the CTA.
History of the CTA
The CTA was enacted in 2021 with the goal of increasing transparency in corporate ownership. The statute required companies formed or registered to do business in the United States to report details about beneficial owners to FinCEN. The stated purpose was to combat illicit finance, money laundering, and the misuse of shell companies by bad actors.
What followed was a turbulent stretch of litigation and regulatory uncertainty that included multiple nationwide injunctions halting enforcement of the CTA’s reporting requirements, citing constitutional concerns. FinCEN briefly reinstated the reporting requirements in early 2025, only to reverse course days later, announcing that it would not enforce penalties against persons who failed to file and would instead pursue new rulemaking to narrow the law’s scope.
In March 2025, FinCEN issued interim final rules that limited BOI reporting obligations to non-U.S. owners of foreign companies that qualify to do business in a U.S. state, signaling an intent to significantly scale back the CTA’s reach and relieve domestic companies and U.S. persons of compliance burdens.
The Final Rule
FinCEN’s final rule makes the March 2025 interim final rule permanent. Specifically, the rule provides, among other things, that: (1) domestic reporting companies (ie. businesses formed in a US jurisdiction) are permanently exempt from all BOI reporting requirements under the CTA and (2) entities formed in a foreign jurisdiction that qualify to do business in a U.S. state remain subject to BOI reporting obligations, although these entities are now exempt from the requirement to report information about U.S. persons. This final rule became effective on August 14, 2026, when it was formally published in the Federal Register.
What Does This Mean?
For those domestic entities such as LLCs and corporations formed in a U.S. state, the CTA’s reporting requirements are not applicable.
However, the CTA’s reporting obligations remain applicable to foreign entities that are registered to do business in a U.S. state, although there is no reporting obligation for any of such entities’ owners who are a U.S. person.
Please consult your Shulman Rogers contact or any of our lawyers listed below if you have questions about how the final rule affects your business, if you have foreign-organized entities that may still have reporting obligations, or if you need assistance determining whether any of your entities fall within the scope of the remaining requirements.
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The contents of this Alert are for informational purposes only and do not constitute legal advice. If you have any questions about this Alert, please contact the Shulman Rogers attorney with whom you regularly work or one of the attorneys listed above.
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