Who would have ever guessed you needed something like a ticker tape to track the implementation of regulation?
Current CTA Status: No Reporting For US entities.
Over the past 12 months, the Corporate Transparency Act (CTA) has experienced significant developments impacting corporate reporting requirements in the United States. The developments have narrowed the CTA’s its scope and adjusted its enforcement landscape.
Court Challenges and Enforcement Pauses:
- December 2024: The U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction halting the CTA’s reporting requirements. This decision was upheld by the Fifth Circuit Court of Appeals, temporarily blocking the enforcement of beneficial ownership information (BOI) reporting.
- January 2025: The U.S. Supreme Court lifted the injunction, allowing the CTA’s reporting requirements to take effect while the Fifth Circuit reviewed the law.
- February 2025: The U.S. District Court for the Eastern District of Texas lifted the injunction on CTA reporting requirements, prompting companies to resume BOI reporting.
- March 2025: In March 2025, significant developments unfolded concerning the Corporate Transparency Act (CTA), fundamentally altering its reporting requirements and enforcement:
Suspension of Enforcement Against U.S. Entities:
- March 2, 2025: The U.S. Department of the Treasury announced a suspension of enforcement for the CTA’s beneficial ownership information (BOI) reporting requirements concerning U.S. citizens and domestic reporting companies. This suspension means that penalties or fines associated with BOI reporting will not be enforced against these entities under both existing and forthcoming rules.
Issuance of Interim Final Rule (IFR):
- March 21, 2025: The Financial Crimes Enforcement Network (FinCEN) published an interim final rule significantly revising the CTA’s reporting obligations. Key changes include:
- Exemption for Domestic Entities: All entities created in the United States, including those previously termed “domestic reporting companies,” and their beneficial owners, are now exempt from reporting BOI to FinCEN.
- Reporting Obligations for Foreign Entities: Existing foreign companies required to report BOI now have an extended deadline of April 25, 2025.
- Public Comment Period: FinCEN has opened a 60-day window for public comments on these changes, with plans to finalize the rules later in 2025.
How Trillium Can Help
Compliance Program Development and Maintenance: Trillium helps you put in place policies and procedures that work for your firm. Developing, applying and maintaining up-to-date policies and procedures is paramount to fulfilling a firm’s regulatory obligations and fiduciary duty.
Regulatory Tracking: Trillium keeps track of changes in the regulation of private equity funds and informs clients through email, phone calls and in-person discussions. We quickly identify and analyze impactful regulations and diligently work with our clients to make the necessary amendments to policies and procedures to ensure ongoing compliance.