We previously shared guidance for venture-backed companies in navigating the requirements of the Corporate Transparency Act (“CTA”). Several important updates have recently occurred, and this article provides an overview of key considerations for companies to navigate CTA compliance.
What is the CTA:
- Adopted as part of the Anti-Money Laundering Act of 2020, the CTA requires most privately-owned companies (“reporting companies”) to file beneficial ownership information (“BOI”) reports with the Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of Treasury.
What happened:
- As a result of several court cases challenging the CTA requirements in 2024, federal district courts issued a preliminary injunction enjoining the enforcement of the CTA.
- On March 21, 2025, FinCEN issued an interim final rule that removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act.
- As a result, only “foreign reporting companies” – companies that are formed under the laws of a non-U.S. country and registered to do business in any U.S. state or tribe – are required to file BOI reports with FinCEN. U.S. persons who are beneficial owners of foreign reporting companies are also not required to submit BOI reports with FinCEN.
What this Means FOR YOUR COMPANY:
Domestic reporting companies are now exempt from the CTA reporting requirements and do not have to report BOI to FinCEN or update or correct BOI previously reported to FinCEN.
With limited exceptions, the interim final rule does not change the existing requirement for foreign reporting companies to file BOI reports. However, the interim final rule extends the deadline to file initial BOI reports and to update or correct previously filed BOI reports to 30 days from the date of this publication to give foreign reporting companies additional time to comply.
CLOSING THOUGHTS:
The special economic and governance rights negotiated in venture financing created complex CTA analytical and reporting hurdles for venture-backed companies. Removal of these requirements has reduced the burden of navigating data protection and privacy concerns when collecting and storing the information required for CTA compliance. However, if your company is a “foreign reporting company”, GwC is available to assist our clients in preparing for and filing BOI reports, as well as navigating related compliance concerns.
This article is for educational purposes and does not constitute legal advice. Please contact us for more information or assistance.
