United States Corporate Transparency Act off again, for now, but Canadians beware

The US Corporate Transparency Act (CTA) is a law that requires companies to disclose information on their beneficial owners. The CTA came into effect on January 1, 2024, and would have required “reporting companies” to submit beneficial ownership information reports (BOI Reports) to the Financial Crimes Enforcement Network (FinCen) starting on January 1, 2025. 

However, the CTA has been the subject of legal challenges and, as a result, the January 1, 2025, implementation date was pushed back to March 21, 2025, for most reporting companies. On February 27, 2025, FinCen announced that no fines, penalties or any other enforcement actions will be taken based on reporting companies’ failure to file BOI Reports by the March 21 deadline until a forthcoming interim final rule becomes effective.

Then, on March 2, 2025, the US Treasury Department issued a press release stating that not only will it not be enforcing penalties or fines under existing regulations, but it will also not enforce penalties against US citizens or domestic reporting companies even after the forthcoming interim final rule changes take effect.

The press release stated that, “The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only.” 

As a result, it appears as if the CTA may ultimately only apply to foreign reporting companies and not to domestic US companies. The concept of “foreign reporting company” is not defined in the press release, but under the CTA currently, US subsidiaries of Canadian companies and Canadian companies registered to do business in the US, among others, would have reporting obligations.

Although there is still uncertainty regarding the CTA, many Canadian companies already have beneficial ownership reporting obligations in Canada. For example, corporations under the Canada Business Corporations Act must already publicly disclose information on their “individuals with significant control,” and any entity with a connection to Quebec (whether formed there or carrying on business there) is subject to provincial beneficial ownership reporting obligations. In Ontario, registers of individuals with significant control must be prepared and maintained as part of a corporation’s records, as is the case in British Columbia. In BC, we are expecting a requirement to publicly disclose beneficial ownership information to come into effect soon. 

With the threat of US CTA disclosure obligations looming, this may be a good time for Canadian companies to ensure they comply with Canadian laws.

Norton Rose Fulbright will continue to track further CTA developments, particularly as they relate to Canadian companies, and with offices across Canada and the United States is well positioned to help our Canadian clients navigate this evolving regulatory landscape.

For more information on the reporting requirements and common pitfalls of the CTA, as currently drafted, see:

• “The Corporate Transparency Act is here—are you ready?”
• “New year, new reporting requirements”

For information on the various legal challenges to the CTA, see our prior analysis:

• “Corporate Transparency Act enforcement is back in effect”
• “US government still pausing the Corporate Transparency Act enforcement, despite US Supreme Court win”
• “Corporate Transparency Act reporting requirements on pause...again”
• “A Texas-sized injunction for the Corporate Transparency Act”