What is the Corporate Transparency Act and what does it mean for my company?
Takeaway: In a major reversal, the U.S. Treasury has eliminated the Corporate Transparency Act's reporting requirements for all U.S. companies; the law now only applies to foreign entities registered to do business in the United States.
In a stunning and significant reversal of policy, the U.S. Treasury Department and its Financial Crimes Enforcement Network (FinCEN) have effectively eliminated the beneficial ownership reporting requirements of the Corporate Transparency Act (CTA) for all domestic U.S. companies. This removes what was anticipated to be a major new compliance burden for millions of U.S. startups and small businesses.
This change, announced in March 2025 and implemented via an interim final rule, fundamentally alters the scope and impact of the CTA.
The Old Rule vs. The New Rule
The Old Rule: The original CTA required nearly every U.S. corporation and LLC to file a detailed report with FinCEN, disclosing the personally identifiable information of all of its "beneficial owners".
The New Rule: The new interim final rule completely exempts all domestic reporting companies from this requirement. The requirement to report beneficial ownership information now applies only to foreign companies that have registered to do business in a U.S. state.
What This Means for Your U.S. Startup
For a standard, U.S.-based startup (such as a Delaware C-Corporation), the implication is simple and direct: you are no longer required to file a Beneficial Ownership Information (BOI) report with FinCEN. This removes the need to collect and report sensitive personal information about your founders, executives, and major investors to the Treasury Department.
Ongoing Requirements for Foreign Companies
The reporting requirement remains in place for foreign entities that are registered to do business in the United States. These companies must still file a BOI report with FinCEN under a new, accelerated timeline:
Existing Foreign Companies: Must file their report within 30 days of the publication of the new rule (March 21, 2025).
New Foreign Companies: Must file their report within 30 days of receiving notice that their registration to do business in the U.S. is effective.
It is important to note that FinCEN is accepting public comments on this interim rule and intends to finalize it later this year. While the current state of the law is a significant relief for domestic startups, founders should continue to monitor this issue for any future changes.
Disclaimer: This post is for general informational purposes only and does not constitute legal, tax, or financial advice. Reading or relying on this content does not create an attorney–client relationship. Every startup’s situation is unique, and you should consult qualified legal or tax professionals before making decisions that may affect your business.