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 December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit lifted the nationwide preliminary injunction issued December 3, 2024, by the U.S. District Court for the Eastern District of Texas and reinstated enforcement of the CTA and its implementing regulations, including the originally scheduled January 1, 2025, deadline for reporting companies formed prior to 2024 to file an initial ownership report with FinCEN. Later, on December 23, 2024, FinCEN adopted extended filing timelines for many reporting companies, which are detailed below. Most importantly, FinCEN extended the January 1, 2025, deadline for reporting companies formed prior to 2024 until Monday, January 13, 2025.
Please note, the information provided here is intended to serve as helpful guidance and may not encompass every nuance of the CTA rules. Itis 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 domestic “Reporting Company” is any corporation, limited liability company, limited partnership or other entity formed under applicable law by filing an organizational document with any state, U.S. territory, the District of Columbia or U.S. Indian tribe that does not qualify for one of the 23 statutory exemption categories under the CTA.
A foreign “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.
Entities such as unincorporated sole proprietorships, general partnerships and trusts whose formation is not contingent upon the public filing of an organizational document with a state secretary of state (or comparable governmental agency) are not treated as Reporting Companies under the CTA.
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.
- Jurisdiction of formation or registration.
- IRS Taxpayer Identification Number.
Individual-related information about each (controlling) “Beneficial Owner”:
- 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.
Individual-related information about each “Company Applicant”:
Each Reporting Company that forms after December 31, 2023 (or first registers 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 “files” the document that creates a U.S. domestic business entity or 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.
| Reporting Type | Reporting Deadline |
| Initial Report for Reporting Companies in existence on Dec. 31, 2023 | No Later than Jan. 13, 2025 |
| Initial Report for Reporting Companies formed on or after September 4, 2024, that had an initial Reporting Deadline between Dec. 3, 2024, and Dec. 23, 2024 | No Later than Jan. 13, 2025 |
| Initial Report for Reporting Companies formed on or after Dec. 3, 2024, and on or before Dec. 23, 2024 | Within 111 days of formation |
| Initial Report for Reporting Companies formed after Dec. 31, 2023, and before Jan. 1, 2025 that did not have an initial Reporting Deadline on or before Dec. 23, 2024 | Within 90 days of formation |
| Initial Report for Reporting Companies formed on or after Jan. 1, 2025 | Within 30 days of formation |
| Amendments, Updates and Corrections*
*Does not apply to Company Applicant BOI Report information |
Within 30 days of the relevant change or awareness of need of correction |
While annual updates to BOI Reports are not required by the CTA Rule, if any information previously reported change (e.g. a beneficial owner moves to a new residential address), the 30-day update timeline would apply at the time the Reporting Company becomes aware of the change.
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 5th 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. Significantly, the Fifth Circuit opinion reinstated the January 1, 2025, filing deadline for reporting companies formed prior to 2024. 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.
Shortly after publication of the Fifth Circuit’s opinion, FinCEN announced updated filing deadlines for reporting companies. Most notably, the original January 1, 2025, deadline for reporting companies formed prior to January 1, 2024 to submit initial BOI Reports is extended until January 13, 2025.
While the U.S. District Courts for the Eastern District of Texas and the Northern District of Alabama have each held the CTA unconstitutional, two other district courts (the U.S. District Courts for the Eastern District of Virginia and the District of Oregon) have rejected similar claims to enjoin the CTA and concluded that the CTA is constitutional. Appeals of the Alabama, Virginia and Oregon district court decisions are pending at the 11th Circuit, 4th Circuit and 9th Circuit courts of appeals, respectively.
The ultimate outcome of the four pending U.S Circuit Court of Appeals cases is uncertain. Pending resolution of this uncertainty reporting companies should diligently monitor judicial and administrative developments and compile all of the necessary materials to complete and file any required BOI Reports, and amendments, in accordance with FinCEN’s reporting timelines.
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 December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit lifted the nationwide preliminary injunction issued December 3, 2024, by the U.S. District Court for the Eastern District of Texas and reinstated enforcement of the CTA and its implementing regulations, including the originally scheduled January 1, 2025, deadline for reporting companies formed prior to 2024 to file an initial ownership report with FinCEN. Later, on December 23, 2024, FinCEN adopted extended filing timelines for many reporting companies, which are detailed below. Most importantly, FinCEN extended the January 1, 2025, deadline for reporting companies formed prior to 2024 until Monday, January 13, 2025.
Please note, the information provided here is intended to serve as helpful guidance and may not encompass every nuance of the CTA rules. Itis 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 domestic “Reporting Company” is any corporation, limited liability company, limited partnership or other entity formed under applicable law by filing an organizational document with any state, U.S. territory, the District of Columbia or U.S. Indian tribe that does not qualify for one of the 23 statutory exemption categories under the CTA.
A foreign “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.
Entities such as unincorporated sole proprietorships, general partnerships and trusts whose formation is not contingent upon the public filing of an organizational document with a state secretary of state (or comparable governmental agency) are not treated as Reporting Companies under the CTA.
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.
- Jurisdiction of formation or registration.
- IRS Taxpayer Identification Number.
Individual-related information about each (controlling) “Beneficial Owner”:
- 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.
Individual-related information about each “Company Applicant”:
Each Reporting Company that forms after December 31, 2023 (or first registers 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 “files” the document that creates a U.S. domestic business entity or 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.
| Reporting Type | Reporting Deadline |
| Initial Report for Reporting Companies in existence on Dec. 31, 2023 | No Later than Jan. 13, 2025 |
| Initial Report for Reporting Companies formed on or after September 4, 2024, that had an initial Reporting Deadline between Dec. 3, 2024, and Dec. 23, 2024 | No Later than Jan. 13, 2025 |
| Initial Report for Reporting Companies formed on or after Dec. 3, 2024, and on or before Dec. 23, 2024 | Within 111 days of formation |
| Initial Report for Reporting Companies formed after Dec. 31, 2023, and before Jan. 1, 2025 that did not have an initial Reporting Deadline on or before Dec. 23, 2024 | Within 90 days of formation |
| Initial Report for Reporting Companies formed on or after Jan. 1, 2025 | Within 30 days of formation |
| Amendments, Updates and Corrections*
*Does not apply to Company Applicant BOI Report information |
Within 30 days of the relevant change or awareness of need of correction |
While annual updates to BOI Reports are not required by the CTA Rule, if any information previously reported change (e.g. a beneficial owner moves to a new residential address), the 30-day update timeline would apply at the time the Reporting Company becomes aware of the change.
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 5th 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. Significantly, the Fifth Circuit opinion reinstated the January 1, 2025, filing deadline for reporting companies formed prior to 2024. 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.
Shortly after publication of the Fifth Circuit’s opinion, FinCEN announced updated filing deadlines for reporting companies. Most notably, the original January 1, 2025, deadline for reporting companies formed prior to January 1, 2024 to submit initial BOI Reports is extended until January 13, 2025.
While the U.S. District Courts for the Eastern District of Texas and the Northern District of Alabama have each held the CTA unconstitutional, two other district courts (the U.S. District Courts for the Eastern District of Virginia and the District of Oregon) have rejected similar claims to enjoin the CTA and concluded that the CTA is constitutional. Appeals of the Alabama, Virginia and Oregon district court decisions are pending at the 11th Circuit, 4th Circuit and 9th Circuit courts of appeals, respectively.
The ultimate outcome of the four pending U.S Circuit Court of Appeals cases is uncertain. Pending resolution of this uncertainty reporting companies should diligently monitor judicial and administrative developments and compile all of the necessary materials to complete and file any required BOI Reports, and amendments, in accordance with FinCEN’s reporting timelines.
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 |
|
Juedon B. Kebede Associate |
(901) 543-5700 | Juedon.kebede@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 |