CTA Scope Narrowed

New FinCEN interim rule eases Corporate Transparency Act reporting for small businesses.

You may recall that the Corporate Transparency Act (CTA), enacted to ferret out money laundering, originally required companies to report to the Financial Crimes Enforcement Network (FinCEN) the personal information of owners and key employees (Beneficial Owners). The CTA reportedly affected more than 32 million small businesses in the U.S. Partly due to the assessment that the burdens imposed on these businesses by the CTA’s reporting requirements outweighed its benefits, FinCEN has issued an interim rule dramatically narrowing the scope of the reporting requirements.

Under the interim rule, only companies formed under the laws of a foreign country and doing business in the U.S. need to report the personal information of their Beneficial Owners to FinCEN. However, those companies do not have to include the personal information of any U.S. owners.

What was not initially clear is whether U.S. companies already registered with FinCEN need to report changes in Beneficial Owner information. The consensus is that they do not.

FinCEN expects to finalize its interim rule later this year. If you have questions in the meantime, you can reach the attorneys at Wright Beamer by calling 248.477.6300.