Beneficial Ownership/Corporate Transparency Act New Interim Rule—No Report Due and Judge Orders Further Briefing to Address that Development
This update will come in two sections—the Removal of the Beneficial Ownership Requirements by FinCEN and the Judge’s Subsequent Ruling to Address that Development in the Top Cop Shop v. Bondi Case.
I. FinCEN Reporting of Beneficial Ownership Pulled AFTER Suggested Deadline for Reporting with the New Interim Rule.
On March 21, 2025, FinCEN issued an interim final rule to exempt all domestic reporting companies and their Beneficial Owners from filing a Beneficial Ownership Information (“BOI”) report under the Corporate Transparency Act (“CTA”), effective immediately upon publication in the Federal Register. The interim final rule revises the definition of a “reporting company” so that entities created in the U.S. are exempt from filing a BOI report and only foreign companies registered to do business in the U.S. are subject to BOI reporting. Overall, the interim final rule provides:
· Entities created in the U.S. and their Beneficial Owners are exempt from filing a BOI report. The interim final rule also removes the requirement for domestic companies to update or correct a previously filed BOI report.
· Entities created in a foreign country and registered to do business in the United States are subject to BOI reporting, but the foreign entity is exempt from reporting the BOI of any U.S. person. Conversely, U.S. persons are exempt from having to provide information to the foreign reporting company for which they are beneficial owners.
o Foreign entities registered to do business in the U.S. before the date of the interim final rule publication must file a BOI report no later than 30 days from that date.
o Foreign entities registered to do business in the U.S. on or after the date of the interim final rule publication have 30 days to file an initial BOI report after receiving notice that their registration is effective.
The exemption for domestic reporting companies provided in the interim final rule suspends any reporting requirements while the rule is being finalized and after public comment. The proposed interim final rule can be viewed at this link: https://fincen.gov/resources/statutes-regulations/federal-register-notices/beneficial-ownership-information-3
II. Top Cop Shop v. Bondi—The Case Involved in Beneficial Ownership and Corporate Transparency Reporting
Today, March 24, 2025, in the Texas Top Cop Shop v. Bondi appeal case, the Judge requested the parties file additional letter briefs no later than 5:00 p.m. on Monday, April 8, 2025. The Order stated the following:
On March 21, 2025, the Treasury Department’s FinCEN announced an interim final rule modifying their enforcement of the CTA.
The new rule exempts domestic entities and U.S. persons from the reporting requirements.
The rule has been submitted to the Federal Register and will become effective upon publication.
The Court requests that the parties file letter briefs stating the impact the new rule has on the appeal, if any.
The letter briefs are due by 5:00 p.m. on April 8, 2025.