Perspectives

The CTA No Longer Applies to U.S. Companies

It’s official-U.S. businesses are off the hook when it comes to the Corporate Transparency Act (CTA). In a major development, the Financial Crimes Enforcement Network (FinCEN) has announced an interim final rule that eliminates the requirement for U.S. companies to file a Beneficial Ownership Information (BOI) report. Instead, only entities formed under foreign laws must comply.

What Happened?

The CTA, which took effect in 2024, originally mandated that most U.S. businesses disclose ownership details to FinCEN as part of an effort to combat illicit financial activities. However, ongoing legal challenges questioning the constitutionality of the CTA led FinCEN to reconsider its stance. Rather than engaging in prolonged litigation, FinCEN has effectively withdrawn the requirement for U.S. businesses, leaving only foreign-formed entities subject to compliance.

What This Means for Employers and Business Owners

If you were preparing to submit a BOI report, you can take that off your to-do list. However, this doesn’t mean compliance requirements in other areas are going away. Employers and businesses should stay vigilant aout other regulatory obligations, such as tax filings, employment laws, and industry-specific reporting requirements. 

What’s Next? 

While this ruling brings relief to many businesses, regulatory landscapes can shift quickly. FinCEN may revisit aspects in the future or introduce alternative reporting measures. WFJ will continue monitoring any updates to keep business owners informed. 

For now, U.S. companies can breathe easier knowing they are not required to comply with the CTA. If you have any questions about corporate compliance, WFJ’s legal team is here to help. Stay informed, stay compliant and focus on what you do best-running your business.