Money & Finance › Fraud, scams & enforcement › Bank Secrecy Act and anti-money-laundering rules
Corporate Transparency Act and LLC ownership reporting
2021; US firms exempted 2025–26· Law or rule
Fact, law or dataA rule, statute, definition or measured number.
The 2021 Corporate Transparency Act required most small companies, including LLCs, to report their real owners to FinCEN; since 2025 US firms are exempt.
See it on the Money & Finance map →How it works
Enacted January 1, 2021, inside the Anti-Money Laundering Act of 2020, it required most corporations and LLCs to name every 'beneficial owner': anyone owning 25% or more or holding substantial control. Filings began in January 2024, covering an estimated 32 million companies. Court challenges paused it in late 2024. In March 2025 an interim Treasury rule exempted all US companies and US owners; only foreign companies registered to do business in a state must still file.
Why it matters
Anonymous LLCs are a favored laundering tool, especially in real estate. The rollback spared small owners paperwork but left that gap largely open for US-formed entities.
Think of it like
Like a building directory that must list the actual person behind each suite, not just 'Suite 400 LLC'.
Facts, rules and data
The statute (31 U.S.C. 5336), FinCEN's 2022 reporting rule and March 2025 interim rule, and federal court rulings in Alabama and Texas that paused enforcement.
Debates and risks
Whether a future administration revives US filings, and whether courts would uphold the law under Congress's commerce power, remain open.
Connections (3)
▸FinCEN: Financial Crimes Enforcement Network now collects only foreign firms' data under Corporate Transparency Act and LLC ownership reportingFact, law or data
The connection
The act put FinCEN in charge of a confidential owner registry, open to police, regulators and, with consent, banks. After court fights and a policy change, FinCEN's March 2025 interim rule cut the filing duty to foreign companies registered to do business in a US state.
When and why
Registry opened January 2024; enforcement paused December 2024; US companies exempted March 2025.
How we know
FinCEN's 2022 and 2025 rules and published notices, and federal court orders in Texas and Alabama.
Debates and risks
Whether the exemption lasts, and what becomes of data already filed by millions of US companies, are unresolved.
▸Bank Secrecy Act and anti-money-laundering rules was expanded by Corporate Transparency Act and LLC ownership reportingFact, law or data
The connection
Banks under the Bank Secrecy Act had to identify customers, but a shell LLC could hide who stood behind it. The Anti-Money Laundering Act of 2020 amended the Bank Secrecy Act to add a federal registry of companies' real owners, closing that gap at least on paper.
When and why
Washington, enacted January 1, 2021, inside the annual defense bill, which passed over a presidential veto unrelated to this provision.
How we know
The act is codified inside the Bank Secrecy Act at 31 U.S.C. 5336.
Debates and risks
With US companies exempted in 2025, whether the expansion achieves its goal is doubtful; banks still collect owner data under a 2016 rule.
▸Single-purpose entity (SPE) borrowers: one building, one LLC if US-formed, were exempted in 2025 from Corporate Transparency Act and LLC ownership reportingFact, law or data
The connection
The Corporate Transparency Act would have required most LLCs, including single-building SPEs, to report their owners to FinCEN from 2024. A March 2025 FinCEN interim rule exempted all US-formed companies, so a typical California or Delaware building LLC no longer files; foreign-formed companies registered in the US still do.
When and why
Enacted January 1, 2021, inside the defense bill; reporting began January 2024; FinCEN's interim final rule came on March 21, 2025.
How we know
The statute (31 U.S.C. 5336), FinCEN's March 2025 interim final rule in the Federal Register, and FinCEN's beneficial ownership guidance.
Debates and risks
Whether the exemption becomes permanent, and whether anonymous LLCs again help hide illicit property buyers, is debated.