Corporate Transparency Act Overhauled: U.S. Entities No Longer Required to Report
Client AlertOver the past several months, the federal judiciary has provided numerous rulings on the enforceability of the Corporate Transparency Act (“CTA”), which became effective January 1, 2024. For a more detailed overview on the CTA, click here.
On February 28th, we alerted business owners that they no longer had an obligation to submit reporting per updated guidance from the Department of Treasury. At the time, the Department of Treasury provided that the CTA would be re-evaluated in the coming weeks.
On March 21st, as promised, the Department of Treasury issued an interim final rule that significantly re-works the CTA. Going forward, all entities created in the United States and their beneficial owners will be exempt from the CTA’s reporting requirements.
The only entities that are still required to submit beneficial ownership reporting are non-U.S. entities (entities formed under the laws of a foreign country) that are registered to do business in any U.S. state or tribal jurisdiction. Importantly, though, these non-U.S. entities are not required to submit beneficial ownership information for any of their owners that are U.S. citizens.
For further guidance on the changing landscape of CTA reporting, business owners should reach out to their BMD legal advisors or contact BMD Member Blake Gerney at brgerney@bmdllc.com.