Corporate Transparency Act
The Corporate Transparency Act (CTA) became effective January 1, 2024. Under this law, various types of businesses in the United States – such as corporations, limited liability companies, and limited partnerships – must report their beneficial ownership information to the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN). The CTA aims to enhance transparency by disclosing who controls these businesses in order to detect and prevent money laundering, fraud, and other unlawful activity.
Not every entity or business is subject to the CTA's reporting requirements and certain exemptions apply. The Bass, Berry & Sims CTA Task Force will continue to monitor developments and publish regular updates to help impacted companies navigate the law and their reporting and compliance obligations. The information and analysis set forth herein is subject to change based on new regulations and regulatory guidance, and other circumstances.
On March 21, 2025, FinCEN announced a new interim final rule narrowing the existing beneficial ownership information (BOI) reporting requirements under the CTA to only apply to entities previously defined as “foreign reporting companies.” Published on March 26, 2025, this interim final rule specifies that: (1) any entities previously identified as “domestic reporting companies” under the CTA are now fully exempt from BOI reporting; and (2) any beneficial owners of “foreign reporting companies” that are U.S. persons are exempt from providing BOI for reporting. FinCEN is accepting comments on the interim final rule until May 27, 2025, and intends to issue a final rule later this year.
Please note, the information provided here is intended to serve as helpful guidance and may not encompass every nuance of the CTA rules. It is not intended to, and does not, provide legal, compliance or other advice to any person, and receipt of this document does not constitute the establishment of an attorney-client relationship. We encourage you to reach out to any member of the Bass, Berry & Sims CTA Task Force with any questions you may have or to confirm what specifically may be required for entities subject to the CTA rules.
Frequently Asked Questions
A “Reporting Company” is any business entity organized outside of the U.S. that is registered to do business in the United States by filing a document with any state, U.S. territory, the District of Columbia or U.S. Indian tribe and that does not qualify for an exemption under any of the 23 categories listed below.
Domestic business entities, including any corporation, limited liability company, or other entity created by the filing of a document with a secretary of state or any similar office under the law of a State or Indian tribe, are no longer included in the definition of “Reporting Company” and are exempt from BOI reporting requirements.
Additionally, the following 23 categories of entities are statutorily exempt from any CTA filings and are not classified as “Reporting Companies”:
- Securities reporting issuers (required to file ’34 Act periodic reports).
- U.S., state and local governments, and instrumentalities, agencies and subdivisions.
- Banks.
- Federal and state licensed credit unions.
- Bank holding companies and savings and loan holding companies.
- Registered money services businesses.
- SEC registered broker or dealers in securities.
- SEC registered securities exchange or clearing agencies.
- Other SEC registered ‘34 Act entities.
- SEC registered investment companies and SEC registered investment advisers.
- Venture and private equity capital fund advisers (files Form ADV with SEC).
- Insurance companies.
- State-licensed insurance producers.
- Commodity Exchange Act registered entities (e.g., commodity trading advisors, futures commission merchants, and commodity pool operators).
- Public accounting firms registered with PCAOB.
- Regulated public utilities.
- Financial market utilities.
- Pooled investment funds/vehicles (VC funds and larger PE buy-out and hedge funds).
- Tax-exempt non-profit entities referenced in IRC 501(c) and exempt from U.S. taxation under IRC 501(a); and political organizations referenced in IRC Sec. 527.
- Entities (owned and controlled by U.S. persons) exclusively assisting a tax-exempt non-profit entity.
- Large operating companies (more than 20 full-time employees and more than $5 million of annual revenues shown on its most recent tax return).
- Subsidiaries. Companies whose equity is “controlled or wholly-owned” by one or more entities described in the exempt categories listed in this chart other than categories 6, 18 and 20 above and 23 below.
- Inactive entities (formed prior to 2020, inactive and with less than $1,000 in assets).
Each Reporting Company must include the following in its initial BOI Report submission:
Entity-related identifying information about the Reporting Company:
- Entity’s full legal name.
- Any trade name, “doing business as” (d/b/a) or “trading as” (t/a) names.
- Current street address of the principal place of business, if the principal place of business is in the United States, or if the principal place of business is outside the United States, the current street address from which the company conducts business in the United States.
- Foreign jurisdiction of formation of the Reporting Company.
- State or Tribal jurisdiction where the Reporting Company first registered.
- IRS Taxpayer Identification Number (TIN), or where a Reporting Company has not been issued a TIN, a tax identification number issued by a foreign jurisdiction and the name of such jurisdiction.
Individual-related information about each “Beneficial Owner” (who is not a U.S. person):
- Beneficial Owner’s full legal name.
- Date of birth.
- Residential street address.
- Unique identifying number from an acceptable identification document, including:
- Non-expired driver’s license.
- Non-expired identification document issued by a U.S. state or local government for the purposes of identifying the individual.
- Non-expired passport issued by the U.S. government.
- If none of the three forms above are applicable, non-expired passport issued by a foreign government.
- Image of the identification document.
- Name of the state or jurisdiction that issued the identification document.
The CTA Rule defines “Beneficial Owners” as any individual who either (i) directly or indirectly “owns or controls not less than 25% of the ownership interests of the entity” OR (ii) “directly or indirectly…exercises substantial control over [the] Reporting Company.”
The CTA does not cap the number of Beneficial Owners that may be listed on an initial BOI Report.
Under the interim rule published on March 26, 2025, a Reporting Company is not required to report BOI of any U.S. persons, and U.S. persons are exempt from having to provide BOI with respect to any Reporting Company for which they are a Beneficial Owner.
Individual-related information about each “Company Applicant”:
Each Reporting Company that first registered to do business in the United States after December 31, 2023, must include on its initial BOI Report the same individual-related information required of a Beneficial Owner for at least one but no more than two “Company Applicants.” The CTA Rule defines “Company Applicants” as the individual who registers a non-U.S. business entity to do business in the U.S., and, if more than one individual is involved in the filing of the document, the individual who is “primarily responsible” for directing or controlling such filing. No more than two individuals per Reporting Company are subject to “applicant” disclosure.
Any foreign entity that became a reporting company on or after March 26, 2025, has 30 days from the date the applicable secretary of state or similar office first provides public notice that the foreign entity is registered to do business.
On December 3, 2024, a Federal District Court in the Eastern District of Texas issued a nationwide preliminary injunction prohibiting any enforcement of the federal CTA and the Beneficial Ownership Information Reporting Requirements Final Rule. On December 5, 2024, the U.S. Treasury appealed the district court ruling to the U.S. Court of Appeals for the Fifth Circuit Court of Appeals. On December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit issued a per curiam opinion (signed by Judges Stewart, Hayes and Higginson) lifting the district court’s preliminary injunction pending the outcome of the U.S. Treasury’s ongoing appeal of the district court’s order. However, a separate panel of the Fifth Circuit subsequently reinstated the preliminary injunction. The case citation is Texas Top Cop Shop, Inc. v. Garland, No. 24-40792 (5th Cir.). The Circuit Court’s opinion and order are available here. On January 23, 2025, the Supreme Court entered an order staying the preliminary injunction in the Top Cop Shop case pending the final resolution of the related appellate proceedings. Despite the Supreme Court’s decision in the Top Cop Shop case, the CTA reporting obligations remained on hold due to a separate nationwide injunction issued by a different judge of the U.S. District Court for the Eastern District of Texas in the case styled Smith v. U.S. Department of the Treasury.
On February 18, the U.S. District Court for the Eastern District of Texas lifted the preliminary injunction previously granted by that court in the Smith case. In response, on February 18, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) extended the deadline to March 21, 2025, for non-exempt reporting companies to file their initial, updated or corrected beneficial ownership information (BOI) reports. FinCEN’s February 27 release further announced a moratorium on any penalties, fines or other enforcement action against reporting companies that fail to file beneficial ownership information reports “until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed.”
On March 2, the U.S. Department of Treasury declared an indefinite moratorium on any enforcement of the CTA reporting obligations applicable to U.S. companies and its owners announcing that it will “not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners.”
On March 21, 2025, FinCEN announced a new interim final rule (published on March 26, 2025) narrowing the existing BOI reporting requirements to exempt (1) “domestic reporting companies” from BOI reporting and (2) U.S. persons from providing BOI for reporting. FinCEN is accepting comments on the interim final rule until May 27, 2025, and intends to issue a final rule later this year.
Despite these recent pronouncements from FinCEN and the Treasury Department, litigation surrounding the constitutionality of the CTA remains ongoing. The appellate proceedings in National Small Business United v. Yellen (NSBA) currently playing out in the Eleventh Circuit Court of Appeals bear particular attention. Oral arguments in NSBA occurred in November and the Eleventh Circuit could decide soon on the merits regarding the constitutionality of the CTA.
Appeals are also currently pending in the Fourth and Ninth Circuits following decisions by the U.S. District Courts for the Eastern District of Virginia and the District of Oregon, respectively, concluding that the CTA is constitutional. Notably, U.S. Department of Justice (DOJ) attorneys under the Trump Administration have filed briefs in the Fourth and Fifth Circuits vigorously defending the constitutionality of the CTA. By contrast, many Republican State Attorneys General also filed amicus appellate briefs in the Top Cop Shop case asserting the unconstitutionality of the CTA. The Fifth Circuit expedited briefing in the Top Cop Shop appeal, and oral arguments were scheduled for March 25, 2025.
In addition to these recent regulatory limitations and legal challenges to the CTA, the bipartisan passing of H.R. 736, and subsequent introduction of S.B. 505 appears to indicate a willingness from the legislative branch to reconsider the burdens of the CTA’s reporting obligations on companies.
While it remains to be seen how these legal challenges to the CTA and pending legislation will evolve in light of this most recent interim final rule and other recent executive orders, it appears that there is little appetite to further expand CTA application or regulatory enforcement within the executive branch of the federal government.
Our CTA Task Force has put together some additional resources to help you stay informed on the latest developments related to this new law.
Filing Information
- BOI E-Filing System
- Filing Instructions / Resources
- BOIR E-Filing Instructions (PDF)
- BOIR Fillable Form (PDF)
FinCEN Resources / Guidance
The Corporate Transparency Act (CTA) became effective January 1, 2024. Under this law, various types of businesses in the United States – such as corporations, limited liability companies, and limited partnerships – must report their beneficial ownership information to the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN). The CTA aims to enhance transparency by disclosing who controls these businesses in order to detect and prevent money laundering, fraud, and other unlawful activity.
Not every entity or business is subject to the CTA's reporting requirements and certain exemptions apply. The Bass, Berry & Sims CTA Task Force will continue to monitor developments and publish regular updates to help impacted companies navigate the law and their reporting and compliance obligations. The information and analysis set forth herein is subject to change based on new regulations and regulatory guidance, and other circumstances.
On March 21, 2025, FinCEN announced a new interim final rule narrowing the existing beneficial ownership information (BOI) reporting requirements under the CTA to only apply to entities previously defined as “foreign reporting companies.” Published on March 26, 2025, this interim final rule specifies that: (1) any entities previously identified as “domestic reporting companies” under the CTA are now fully exempt from BOI reporting; and (2) any beneficial owners of “foreign reporting companies” that are U.S. persons are exempt from providing BOI for reporting. FinCEN is accepting comments on the interim final rule until May 27, 2025, and intends to issue a final rule later this year.
Please note, the information provided here is intended to serve as helpful guidance and may not encompass every nuance of the CTA rules. It is not intended to, and does not, provide legal, compliance or other advice to any person, and receipt of this document does not constitute the establishment of an attorney-client relationship. We encourage you to reach out to any member of the Bass, Berry & Sims CTA Task Force with any questions you may have or to confirm what specifically may be required for entities subject to the CTA rules.
Frequently Asked Questions
A “Reporting Company” is any business entity organized outside of the U.S. that is registered to do business in the United States by filing a document with any state, U.S. territory, the District of Columbia or U.S. Indian tribe and that does not qualify for an exemption under any of the 23 categories listed below.
Domestic business entities, including any corporation, limited liability company, or other entity created by the filing of a document with a secretary of state or any similar office under the law of a State or Indian tribe, are no longer included in the definition of “Reporting Company” and are exempt from BOI reporting requirements.
Additionally, the following 23 categories of entities are statutorily exempt from any CTA filings and are not classified as “Reporting Companies”:
- Securities reporting issuers (required to file ’34 Act periodic reports).
- U.S., state and local governments, and instrumentalities, agencies and subdivisions.
- Banks.
- Federal and state licensed credit unions.
- Bank holding companies and savings and loan holding companies.
- Registered money services businesses.
- SEC registered broker or dealers in securities.
- SEC registered securities exchange or clearing agencies.
- Other SEC registered ‘34 Act entities.
- SEC registered investment companies and SEC registered investment advisers.
- Venture and private equity capital fund advisers (files Form ADV with SEC).
- Insurance companies.
- State-licensed insurance producers.
- Commodity Exchange Act registered entities (e.g., commodity trading advisors, futures commission merchants, and commodity pool operators).
- Public accounting firms registered with PCAOB.
- Regulated public utilities.
- Financial market utilities.
- Pooled investment funds/vehicles (VC funds and larger PE buy-out and hedge funds).
- Tax-exempt non-profit entities referenced in IRC 501(c) and exempt from U.S. taxation under IRC 501(a); and political organizations referenced in IRC Sec. 527.
- Entities (owned and controlled by U.S. persons) exclusively assisting a tax-exempt non-profit entity.
- Large operating companies (more than 20 full-time employees and more than $5 million of annual revenues shown on its most recent tax return).
- Subsidiaries. Companies whose equity is “controlled or wholly-owned” by one or more entities described in the exempt categories listed in this chart other than categories 6, 18 and 20 above and 23 below.
- Inactive entities (formed prior to 2020, inactive and with less than $1,000 in assets).
Each Reporting Company must include the following in its initial BOI Report submission:
Entity-related identifying information about the Reporting Company:
- Entity’s full legal name.
- Any trade name, “doing business as” (d/b/a) or “trading as” (t/a) names.
- Current street address of the principal place of business, if the principal place of business is in the United States, or if the principal place of business is outside the United States, the current street address from which the company conducts business in the United States.
- Foreign jurisdiction of formation of the Reporting Company.
- State or Tribal jurisdiction where the Reporting Company first registered.
- IRS Taxpayer Identification Number (TIN), or where a Reporting Company has not been issued a TIN, a tax identification number issued by a foreign jurisdiction and the name of such jurisdiction.
Individual-related information about each “Beneficial Owner” (who is not a U.S. person):
- Beneficial Owner’s full legal name.
- Date of birth.
- Residential street address.
- Unique identifying number from an acceptable identification document, including:
- Non-expired driver’s license.
- Non-expired identification document issued by a U.S. state or local government for the purposes of identifying the individual.
- Non-expired passport issued by the U.S. government.
- If none of the three forms above are applicable, non-expired passport issued by a foreign government.
- Image of the identification document.
- Name of the state or jurisdiction that issued the identification document.
The CTA Rule defines “Beneficial Owners” as any individual who either (i) directly or indirectly “owns or controls not less than 25% of the ownership interests of the entity” OR (ii) “directly or indirectly…exercises substantial control over [the] Reporting Company.”
The CTA does not cap the number of Beneficial Owners that may be listed on an initial BOI Report.
Under the interim rule published on March 26, 2025, a Reporting Company is not required to report BOI of any U.S. persons, and U.S. persons are exempt from having to provide BOI with respect to any Reporting Company for which they are a Beneficial Owner.
Individual-related information about each “Company Applicant”:
Each Reporting Company that first registered to do business in the United States after December 31, 2023, must include on its initial BOI Report the same individual-related information required of a Beneficial Owner for at least one but no more than two “Company Applicants.” The CTA Rule defines “Company Applicants” as the individual who registers a non-U.S. business entity to do business in the U.S., and, if more than one individual is involved in the filing of the document, the individual who is “primarily responsible” for directing or controlling such filing. No more than two individuals per Reporting Company are subject to “applicant” disclosure.
Any foreign entity that became a reporting company on or after March 26, 2025, has 30 days from the date the applicable secretary of state or similar office first provides public notice that the foreign entity is registered to do business.
On December 3, 2024, a Federal District Court in the Eastern District of Texas issued a nationwide preliminary injunction prohibiting any enforcement of the federal CTA and the Beneficial Ownership Information Reporting Requirements Final Rule. On December 5, 2024, the U.S. Treasury appealed the district court ruling to the U.S. Court of Appeals for the Fifth Circuit Court of Appeals. On December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit issued a per curiam opinion (signed by Judges Stewart, Hayes and Higginson) lifting the district court’s preliminary injunction pending the outcome of the U.S. Treasury’s ongoing appeal of the district court’s order. However, a separate panel of the Fifth Circuit subsequently reinstated the preliminary injunction. The case citation is Texas Top Cop Shop, Inc. v. Garland, No. 24-40792 (5th Cir.). The Circuit Court’s opinion and order are available here. On January 23, 2025, the Supreme Court entered an order staying the preliminary injunction in the Top Cop Shop case pending the final resolution of the related appellate proceedings. Despite the Supreme Court’s decision in the Top Cop Shop case, the CTA reporting obligations remained on hold due to a separate nationwide injunction issued by a different judge of the U.S. District Court for the Eastern District of Texas in the case styled Smith v. U.S. Department of the Treasury.
On February 18, the U.S. District Court for the Eastern District of Texas lifted the preliminary injunction previously granted by that court in the Smith case. In response, on February 18, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) extended the deadline to March 21, 2025, for non-exempt reporting companies to file their initial, updated or corrected beneficial ownership information (BOI) reports. FinCEN’s February 27 release further announced a moratorium on any penalties, fines or other enforcement action against reporting companies that fail to file beneficial ownership information reports “until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed.”
On March 2, the U.S. Department of Treasury declared an indefinite moratorium on any enforcement of the CTA reporting obligations applicable to U.S. companies and its owners announcing that it will “not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners.”
On March 21, 2025, FinCEN announced a new interim final rule (published on March 26, 2025) narrowing the existing BOI reporting requirements to exempt (1) “domestic reporting companies” from BOI reporting and (2) U.S. persons from providing BOI for reporting. FinCEN is accepting comments on the interim final rule until May 27, 2025, and intends to issue a final rule later this year.
Despite these recent pronouncements from FinCEN and the Treasury Department, litigation surrounding the constitutionality of the CTA remains ongoing. The appellate proceedings in National Small Business United v. Yellen (NSBA) currently playing out in the Eleventh Circuit Court of Appeals bear particular attention. Oral arguments in NSBA occurred in November and the Eleventh Circuit could decide soon on the merits regarding the constitutionality of the CTA.
Appeals are also currently pending in the Fourth and Ninth Circuits following decisions by the U.S. District Courts for the Eastern District of Virginia and the District of Oregon, respectively, concluding that the CTA is constitutional. Notably, U.S. Department of Justice (DOJ) attorneys under the Trump Administration have filed briefs in the Fourth and Fifth Circuits vigorously defending the constitutionality of the CTA. By contrast, many Republican State Attorneys General also filed amicus appellate briefs in the Top Cop Shop case asserting the unconstitutionality of the CTA. The Fifth Circuit expedited briefing in the Top Cop Shop appeal, and oral arguments were scheduled for March 25, 2025.
In addition to these recent regulatory limitations and legal challenges to the CTA, the bipartisan passing of H.R. 736, and subsequent introduction of S.B. 505 appears to indicate a willingness from the legislative branch to reconsider the burdens of the CTA’s reporting obligations on companies.
While it remains to be seen how these legal challenges to the CTA and pending legislation will evolve in light of this most recent interim final rule and other recent executive orders, it appears that there is little appetite to further expand CTA application or regulatory enforcement within the executive branch of the federal government.
Our CTA Task Force has put together some additional resources to help you stay informed on the latest developments related to this new law.
Filing Information
- BOI E-Filing System
- Filing Instructions / Resources
- BOIR E-Filing Instructions (PDF)
- BOIR Fillable Form (PDF)
FinCEN Resources / Guidance
Professionals
| Name | Phone | |
|---|---|---|
|
Shelby Bess Associate |
(901) 543-5723 | Shelby.bess@bassberry.com |
|
Christopher J. Climo Associate |
(615) 742-7741 | christopher.climo@bassberry.com |
|
Faith Dibble International Trade Attorney |
(202) 827-2965 | faith.dibble@bassberry.com |
|
Phil Fox Associate |
(615) 742-6538 | Phil.Fox@bassberry.com |
|
B. Riney Green Member |
(615) 742-7866 | rgreen@bassberry.com |
|
Angela Humphreys Member |
(615) 742-7852 | ahumphreys@bassberry.com |
|
Danielle M. Hunt Associate |
(615) 742-7788 | Danielle.Hunt@bassberry.com |
|
Ben Kelly Associate |
(615) 742-7745 | Ben.kelly@bassberry.com |
|
Todd R. Overman Member |
(202) 827-2975 | toverman@bassberry.com |
|
Katherine Smalley Member |
(615) 742-7709 | katie.smalley@bassberry.com |
|
Ryan D. Thomas Member |
(615) 742-7765 | rthomas@bassberry.com |