This past weekend, the United States Department of Treasury announced that, with respect to the Corporate Transparency Act, it will no longer enforce penalties or fines against United States citizens or domestic reporting companies. Further clarification of the Corporate Transparency Act’s enforcement is expected before its new deadline for failure to file – March 21, 2025.

Background

Originally effective on January 1, 2024, the Corporate Transparency Act required all state registered entities to disclose information about the natural persons controlling the entity – their “beneficial owners.” Challenges to the law’s constitutionality sprung up over the course of the year, resulting in various enforcement injunctions – two of which were applicable nationwide. Between the several injunctions and appeals, the ultimate enforcement date was due to be delayed until at least March 21, 2025.

Current Status

In an unexpected announcement on March 2, 2025, the Treasury stated that its reporting obligations will no longer be enforced against United States citizens and domestic companies. In other words, reporting will be limited to foreign companies and foreign beneficial owners. The Treasury has yet to provide guidance clarifying the implications of this rule on multilayered entities and companies that have already submitted voluntary reports.

Wilke Fleury continues to monitor the changes to the Corporate Transparency Act.