When Was the Corporate Transparency Act Passed?

The Corporate Transparency Act was passed on January 1, 2021, when the Senate joined the House in overriding a presidential veto of the National Defense Authorization Act for Fiscal Year 2021, the larger bill that carried it.¹ The reporting requirements it created did not take effect until January 1, 2024, and a March 2025 rule change has since exempted all domestic U.S. companies from those requirements.

How the Law Was Enacted

The Corporate Transparency Act was not a standalone bill. It was folded into the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, designated H.R. 6395. Congress passed the defense package with broad bipartisan support in December 2020, but the president vetoed it later that month.

The House voted 322–87 on December 28, 2020, to override the veto. The Senate followed on January 1, 2021, with an 81–13 vote. That second vote enacted the entire bill, and the Corporate Transparency Act became federal law along with it.¹

What the Law Was Designed to Do

The act is codified at 31 U.S.C. § 5336. It directed the Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Department of the Treasury, to build a secure database of beneficial ownership information for most U.S. businesses.²

The purpose was to close a gap that had let anonymous shell companies serve as vehicles for money laundering, tax evasion, and other financial crimes. Before the CTA, no uniform federal rule required U.S. businesses to disclose who actually owned or controlled them.

The Original 2024 Reporting Timeline

Although Congress passed the law in January 2021, FinCEN needed several years to write the implementing regulations and build the filing system. The agency published its final rule on September 30, 2022, with an effective date of January 1, 2024.³

Under that original schedule, companies existing before January 1, 2024, had until January 1, 2025, to file an initial report.⁴ Companies formed during 2024 had 90 days from receiving notice of registration, and companies formed on or after January 1, 2025, had 30 days. Those deadlines no longer apply to domestic companies.

Court Challenges and the March 2025 Rule Change

The reporting rule ran into court challenges almost as soon as it took effect. In December 2024 a federal district court enjoined enforcement of the act, and the Fifth Circuit Court of Appeals vacated a stay of that injunction in late December 2024, leaving enforcement in limbo heading into 2025.⁵

On March 2, 2025, the Treasury Department announced it would not enforce penalties or fines against U.S. citizens, domestic reporting companies, or their beneficial owners, and said it planned to narrow the reporting rule to foreign companies.⁶

FinCEN followed through on March 26, 2025, publishing an interim final rule that formally exempted all domestic companies. The rule redefined “reporting company” to cover only entities formed under the law of a foreign country that have registered to do business in the United States.⁷ Treasury also indicated it would pursue a further rulemaking to make the change permanent.

What Domestic Companies Have to Do Now

If your business was created in the United States by filing formation documents with a secretary of state or similar office, you are not required to file a beneficial ownership information report with FinCEN. This applies regardless of when you formed your company. It also applies if you already filed a report before the rule changed; you do not need to update or correct anything you previously submitted.⁸

The exemption covers corporations, limited liability companies, and any other entity type created by filing with a state or tribal authority. FinCEN has stated it will not enforce penalties or fines against domestic companies or their beneficial owners.⁶

One caveat worth keeping in mind: the current exemption comes from an interim final rule, not a permanent regulation. FinCEN has said it intends to make the change permanent through a separate rulemaking. Until that concludes, the interim rule remains in effect and domestic companies have no filing obligation.

Who Still Has to File

Entities formed under foreign law that have registered to do business in any U.S. state or tribal jurisdiction still have to file. The 2025 rule limits what they report, however: foreign reporting companies do not need to include information about any beneficial owner who is a U.S. person.⁷

The current filing deadlines for foreign reporting companies are:

Registered before March 26, 2025: file a report by April 25, 2025.
Registered on or after March 26, 2025: file within 30 calendar days of receiving notice that the registration is effective or the date the registration becomes part of the public record, whichever comes first.

A foreign reporting company whose only beneficial owners are U.S. persons does not have to report any beneficial owners, though it may still need to file a report with company-level information. Penalties under 31 U.S.C. § 5336 for willful failure to file or for false information, which can reach $500 per day in civil fines and up to two years in prison with fines of up to $10,000, currently apply only to foreign reporting companies that miss their obligations.²

1
Financial Crimes Enforcement Network. Frequently Asked Questions
2
Office of the Law Revision Counsel. 31 USC 5336 – Beneficial Ownership Information Reporting Requirements
3
Federal Register. Beneficial Ownership Information Reporting Requirements
4
Financial Crimes Enforcement Network. Beneficial Ownership Information Reporting Rule Fact Sheet
5
Fifth Circuit Court of Appeals. Texas Top Cop Shop – Order
6
U.S. Department of the Treasury. Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act
7
Federal Register. Beneficial Ownership Information Reporting Requirement – Revision and Deadline Extension
8
Financial Crimes Enforcement Network. Beneficial Ownership Information Reporting