It came as no surprise when the Trump Administration put the final nail in the coffin of the greatest corporate transparency experiment of our generation. The Corporate Transparency Act was a well-intentioned but deeply flawed attempt to allow federal regulators to combat money laundering, terrorism financing, tax fraud, human and drug trafficking, and other financial crimes perpetrated through shell corporate entities, such as LLCs. It required entities to report their true beneficial owners and "substantial control" parties to the U.S. Department of Treasury's Financial Crimes Enforcement Network, giving law enforcement an unprecedented window into the opaque world of anonymous shell companies.
What doomed the CTA was not merely the current political climate; it was the enormous reporting burden placed on millions of small and mid-sized businesses across America. The CTA exempted 23 categories of entities—including publicly traded companies, banks, credit unions, and businesses with a US office, 20+ full-time employees, and more than $5 million in gross receipts. But it still swept in the vast majority of America's roughly 36 million entities (including HOAs, real estate holding companies, and small family businesses), each of which needed to file a complicated ownership report with Treasury, and then update it regularly when various changes occurred in the ownership structure. Penalties were severe, even for inadvertent noncompliance. We helped many of our clients with these time-consuming reports, and in my estimation, they were far more complicated than an ordinary business owner could reasonably be expected to manage without sophisticated legal counsel.
Technically, the CTA has not been repealed and the statute remains on the books at 31 U.S.C. § 5336. But the Trump Administration used its regulatory authority to gut the law's domestic impact in three main ways. First, Treasury suspended enforcement of all CTA penalties and fines on March 2, 2025. Then, on March 26, 2025, FinCEN published an interim final rule exempting all domestic reporting companies from the filing requirements. Finally, on August 14, 2026, FinCEN issued a final rule permanently removing the requirement for U.S. companies and U.S. persons to report beneficial ownership information. Today, only certain foreign reporting companies registered to do business in the United States remain subject to the CTA's reporting obligations.
The day for corporate transparency in America will come again. Because the CTA remains intact, a future administration could reimplement domestic reporting requirements through new rulemaking without the need for entirely new legislation. When that day arrives, regulators should design a realistic reporting mechanism that takes into account the burdens ordinary American businesses will face complying with the reporting requirements.
