In short
In 2024 the Corporate Transparency Act required most LLCs, including single-member ones, to report their beneficial owners to FinCEN, with penalties up to $500 a day and $10,000 per entity. A court paused enforcement in December 2024, and in March 2025 FinCEN removed the requirement for companies formed in the United States. Foreign-formed companies registered here still report.
Update, 2025. This post was written in December 2024, while a federal court had paused the law. In March 2025 FinCEN issued an interim final rule that removed the beneficial ownership reporting requirement for companies formed in the United States and for U.S. persons. Only companies formed abroad and registered to do business in the U.S. still have to report. The rest of the post is the picture as it stood at the time, kept for the record. If you hold entities formed outside the U.S., check FinCEN's current guidance.
"A Texas court issued a temporary restraining order on enforcement, meaning businesses are not currently required to file reports." - Jake Baker
Introduction
The Corporate Transparency Act (CTA) took effect in 2024 and put a new compliance obligation on businesses across the United States. Its purpose was to make ownership transparent and harder to hide: every reporting company had to tell FinCEN, the Financial Crimes Enforcement Network, who its beneficial owners were.
Enforcement was paused by a federal court order in December 2024, but the penalties on the books were steep enough that every owner needed to understand them.
Who had to report?
The reporting requirement applied broadly:
- Single-member LLCs, even ones with almost no activity.
- Small businesses, most of which did not qualify for an exemption.
For a real estate investor with an LLC per property, that meant a report per entity.
Key deadlines
- Entities formed before January 1, 2024: initial reports due by December 31, 2024.
- Entities formed on or after January 1, 2024: reports due within 30 days of formation, with a temporary 90-day window allowed for entities formed during 2024.
What had to be reported?
For the entity and each beneficial owner:
- Full legal name.
- Date of birth.
- Residential address.
- A unique identifying number, such as a driver's license or passport number.
Any change to that information had to be reported within 30 days.
The penalties
- Fines up to $500 a day for a late filing.
- A maximum penalty of $10,000 per entity.
Ten LLCs, ten exposures. That is why the headline number mattered to investors more than to most business owners.
What the court order meant
A Texas court issued a temporary restraining order on enforcement in December 2024, so businesses were not required to file while it stood. The relief was temporary, and the sensible move at the time was to prepare anyway: read FinCEN's guidance, work out whether each entity qualified for an exemption, gather the owners' information, and watch for the next ruling.
Where things landed is in the update at the top of this post. For the current rules, go to FinCEN's beneficial ownership page.
Key takeaways
- The CTA asked every reporting company, single-member LLCs included, to name its owners to FinCEN.
- The penalties were $500 a day and up to $10,000 per entity.
- As of March 2025, companies formed in the United States no longer have to report. Foreign-formed companies registered here still do.
- Keep your entity records clean regardless. The next rule will find you anyway.
Written by Jake Baker, founder of BookkeepingRE. Bookkeeping for real estate investors, from the first rental to a hundred doors. Book a Discovery Call or read more from TheLedger.