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CTA UPDATE: FinCEN Removes Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons
By April 22, 2025 Posted in Community Association Law Share
As you may recall, The Corporate Transparency Act or the “CTA,” established under Title LXIV of the Defense Act, was introduced in 2023 and took effect on January 1, 2024, carrying with it significant implications for landlords and property owners. At the time of its effective date, the CTA introduced a federal reporting requirement for companies operating in the United States. The CTA did not replace state-level reporting procedures but instead created a national reporting system and database for company owners. For landlords, this meant that if you own rental units through a corporate structure (for example, an LLC), you may be subject to CTA reporting requirements. For condo, co-op and HOA’s, unless you qualified for an exemption based on your tax filing status, you might also be subject to CTA reporting requirements.
Following the effective date, however, litigation ensued in several district and appellate courts around the Country, questioning the constitutionality of the CTA and its reporting requirements. Some of these litigation efforts included the United States District Court for the Eastern District of Texas’ preliminary injunction against the enforcement of the CTA, the Fifth Circuit Court of Appeals stay over the injunction, the lifting of the preliminary injunction by the US District Court for the Eastern District of Texas, and the announcement from the Financial Crimes Enforcement Network (“FinCEN”) that “it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information by the current deadlines.”
Since then, FinCEN issued an interim final rule in late March 2025, that removed the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act. “FinCEN revised the definition of “reporting company” in its implementing regulations to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). FinCEN also exempt entities previously known as “domestic reporting companies” from BOI reporting requirements.”
This means that all “entities created in the United States [including Associations] and their beneficial owners will be exempt from the requirement to report BOI to FinCEN. Foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements must report their BOI to FinCEN under new deadlines.”
We will continue to keep you updated on the ongoing developments regarding the CTA and its reporting requirements. If you would like to discuss this decision, please let us know and we would be happy to arrange a call and provide more information.
The information in this Client Alert is provided solely for information purposes. It should not be construed as legal advice on any specific matter and is not intended to create an attorney-client relationship. The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular circumstances. Each legal matter is unique, and prior results do not guarantee a similar outcome.