CTA Filing Rules: 2025 Changes, Who Must File, and Penalties

Corporate Transparency Act filing requirements now apply only to foreign-formed entities that have registered to do business in the United States. If you own a U.S.-formed LLC, corporation, limited partnership, or similar entity, you do not need to file a beneficial ownership information (BOI) report with FinCEN. That has been the rule since an interim final rule took effect on March 26, 2025.¹

What Changed in 2025

The Corporate Transparency Act, enacted in 2021, originally required both domestic and foreign entities to report their beneficial owners to FinCEN. That framework never fully took effect. After court challenges and enforcement pauses, the Department of the Treasury announced on March 2, 2025, that it would not enforce CTA penalties against U.S. citizens or domestic reporting companies and would narrow the rule to foreign entities only.²

FinCEN followed on March 26, 2025, with an interim final rule that revised the regulatory definition of “reporting company” to mean only entities formed under foreign law that have registered to do business in a U.S. state or tribal jurisdiction. The rule also added all domestic entities to the exempt list.³ The rule remains subject to public comment and possible revision, so the framework could change again.

Do U.S. Companies Have to File?

No. The exemption covers every entity type that would previously have been classified as a domestic reporting company, including LLCs, corporations, and limited partnerships formed under state or tribal law. Treasury has stated it will not enforce CTA penalties against U.S. citizens or domestic companies.²

The practical caution is to ignore third-party services that still market CTA compliance filings to domestic businesses. Check FinCEN’s guidance directly at fincen.gov/boi before paying anyone to file on your behalf.⁴

Who Still Has to File

The only entities required to report are foreign-formed companies that registered to do business in the United States by filing a document with a secretary of state or similar office.⁴ A company incorporated in Canada that registers with the Delaware Secretary of State qualifies. A company incorporated in Delaware does not, regardless of who owns it.

Even foreign reporting companies get a significant break: they do not report any U.S. persons as beneficial owners. If every owner of a foreign entity is a U.S. citizen or resident, the entity still files a report, but the U.S. owners are excluded from the beneficial ownership disclosures.¹

Exemptions for Foreign Entities

Twenty-three categories of entities are exempt from filing even when they are foreign-formed. These exemptions target organizations already subject to substantial government oversight, including banks, credit unions, insurance companies, registered broker-dealers, and tax-exempt entities.⁵

The large operating company exemption is one of the more useful categories. A foreign reporting company qualifies only if it meets all three of these criteria at the same time: more than 20 full-time employees in the United States; more than $5 million in gross receipts or sales on a prior-year federal tax return; and a physical office in the United States that the entity owns or leases, distinct from any unaffiliated business. A foreign entity with 50 U.S. employees but no U.S. office does not qualify.⁵

Who Counts as a Beneficial Owner

The statute defines a beneficial owner as any individual who either exercises substantial control over the reporting company or owns at least 25 percent of its ownership interests. Both prongs apply independently.⁶

Substantial control covers senior officers, individuals who can appoint or remove officers or board members, and anyone who directs or has significant influence over major company decisions. A person can qualify under this prong without owning any equity. The ownership prong captures anyone holding 25 percent or more through equity, stock, voting rights, capital interests, or convertible instruments. U.S. persons are excluded from reporting even if they meet these definitions.

Five categories of individuals are specifically excluded from the beneficial owner definition: minor children (whose parent or guardian is reported instead), nominees acting on behalf of another individual, employees whose control comes solely from their employment, individuals whose only interest is through inheritance rights, and creditors who don’t otherwise exercise substantial control or hold 25 percent ownership.⁶

Company Applicants

Foreign reporting companies that first registered to do business in the United States on or after January 1, 2024, must also identify their company applicants. A company applicant is the person who directly files the registration documents or the individual primarily responsible for directing that filing. If a law firm handles the registration, both the attorney who directed the work and the paralegal who submitted it could be reportable.⁵ Foreign entities that registered before January 1, 2024, do not report company applicant information.

Information the Report Requires

A BOI report has two parts: information about the reporting company and information about each reportable individual.

For the entity, the report must include the full legal name, any trade names or “doing business as” names, the jurisdiction of formation, the current street address of the principal place of business in the United States, and the taxpayer identification number (typically an EIN). A P.O. box or the address of a registered agent does not satisfy the address requirement.

For each beneficial owner and, where applicable, each company applicant, the report requires the individual’s full legal name, date of birth, current residential address, and an identifying number from a non-expired government-issued document such as a passport or driver’s license. A clear image of that document must be uploaded with the report. Company applicants who file documents as part of their professional duties may use a business address instead of a home address.

How and When to File

Reports are submitted through the BOI E-Filing system at boiefiling.fincen.gov.⁷ You can complete a web-based form in the browser or download a PDF version to fill out offline and upload. You select the report type (initial, updated, or corrected), enter the required data, upload identifying document images, and certify accuracy before submitting. There is no filing fee. After submission, the system generates a confirmation ID and a transcript; keep both in the entity’s records.

Two deadlines apply under the interim final rule:

Foreign reporting companies already registered to do business in the United States before March 26, 2025, had until April 25, 2025, to file their initial BOI report.
Foreign entities that register on or after March 26, 2025, have 30 calendar days after receiving notice that their U.S. registration is effective to file an initial report.⁴

Filing is not a one-time event for active foreign reporting companies. If reported information changes, such as a beneficial owner’s new address, a new individual acquiring 25 percent or more of the entity, or a change in the company’s legal name, an updated report is due within 30 calendar days of the change. Corrections to inaccurate information must be submitted within 30 days of discovering the error.

Penalties and Enforcement

Statutory penalties for willful violations remain significant. A person who knowingly provides false information or fails to file a required report faces a civil penalty of up to $500 per day for each day the violation continues. Criminal penalties can reach $10,000 in fines and up to two years in prison.⁶ The statute uses the word “willfully,” so inadvertent errors are treated differently from deliberate concealment, but correcting mistakes promptly through the portal is the safest course.

Treasury has said it will not enforce penalties against U.S. citizens or domestic companies.² Foreign reporting companies and their non-U.S. beneficial owners remain fully subject to enforcement.

1
Financial Crimes Enforcement Network. FinCEN Removes Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons
2
U.S. Department of the Treasury. Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies
3
eCFR. 31 CFR 1010.380 – Reports of Beneficial Ownership Information
4
Financial Crimes Enforcement Network. Beneficial Ownership Information Reporting
5
Financial Crimes Enforcement Network. Frequently Asked Questions – Beneficial Ownership Information Reporting
6
Office of the Law Revision Counsel. 31 USC 5336 – Beneficial Ownership Information Reporting Requirements
7
Financial Crimes Enforcement Network. BOI E-Filing