This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.
Take a typical situation: a founder’s counsel opens the firm’s closing checklist template for a Florida company sale, and there they still are — four line items from 2024. Confirm target’s BOI filing. Form merger sub and file initial BOI report within 90 days. Collect beneficial owner FinCEN identifiers. Update BOI report post-closing. Whether any of those lines still belongs on the checklist depends on a regulatory U-turn that happened in March 2025, and on a detail lawyers keep forgetting to check: where each entity in the structure was formed.
How we got here, compressed
The Corporate Transparency Act was supposed to put nearly every private company in America into a federal beneficial ownership database. Through 2024 it produced mostly litigation — a federal district court held the statute unconstitutional as to the plaintiffs before it, nationwide injunctions flickered on and off, and deadlines moved four times. Then in March 2025, FinCEN mooted most of the fight by rule. In an interim final rule published March 26, 2025, FinCEN redefined “reporting company” to cover only entities formed under foreign law that have registered to do business in a U.S. state by filing with a secretary of state. Everything formed in the United States — the entire category previously called “domestic reporting companies” — became exempt, and U.S. persons no longer need to be reported as beneficial owners of anything. FinCEN also announced it would not enforce BOI penalties against U.S. citizens or domestic companies. By the agency’s own math, the rule removed more than 99 percent of the entities the statute originally covered. The official state of play lives on FinCEN’s BOI page, and as of this writing the promised final rule has not issued — the interim rule is the regime.
What still belongs on the checklist
So is the answer “delete the four line items”? Not quite. First, the formation-side items really are gone for domestic structures. The merger sub, the blocker, the new holdco formed in Delaware or Florida the week of closing — none of them files anything with FinCEN under the current rule, and the closing checklist should stop saying otherwise, if only because zombie checklist items erode the credibility of the live ones.
Second, the diligence item survives wherever the structure has a foreign-formed entity registered in the United States. That is not an exotic fact pattern in Florida. A BVI or Cayman holding company registered with Sunbiz to do business here, a Canadian operating subsidiary qualified in three states, a foreign family vehicle that registered to hold the real estate — under the interim rule those are the reporting companies. Diligence should confirm they filed, what they filed, and whether anything filed became inaccurate, because the compliance duties that survive include keeping reports current after ownership changes — which is precisely what a closing does. A buyer acquiring a foreign-formed registered entity should calendar the post-closing update the way it calendars any other regulatory notice, with the practical deadline running in days, not quarters. The beneficial owners reported going forward may be few — U.S. persons are out — but the entity-level obligation is alive. This slots naturally into the same workstream where Florida deals already interrogate foreign ownership: the section 692.213 foreign-principal affidavit on the real estate and the FIRPTA certificate on the tax side. The deal team that is already asking “who ultimately owns this seller” for those purposes should ask the CTA question in the same breath.
Third, the representation should be redrafted, not deleted. The 2024-era rep — target has filed all required BOI reports and each is accurate — swept in every domestic company and became mostly noise. The 2026 version is narrower and more useful: no entity in the target group is a reporting company as currently defined, or, if any is, it has filed accurate and current reports. That formulation self-adjusts if the pending final rule shifts the definition again, and it forces the seller to actually inventory formation jurisdictions and registrations — an exercise that catches other problems too, from lapsed qualifications to the occasional administratively dissolved entity that needs reinstatement before it can convey anything.
Fourth, remember the states are writing their own rules. New York enacted an LLC transparency regime on the CTA’s chassis, with disclosure obligations for LLCs formed or registered there phasing in from 2026, and other states have introduced lookalikes. A deal with a New York LLC anywhere in the structure has a state-level BOI question even though FinCEN has stood down for domestic entities. The federal U-turn did not end beneficial-ownership compliance; it federalized the exemption and left a patchwork growing underneath it. And one beneficial-ownership regime never blinked at all: banks still collect ownership certifications under FinCEN’s separate customer due diligence rule, so a financed closing still involves somebody diagramming the cap table for a compliance officer. The clean drafting response is a cooperation covenant — each party agrees to furnish the ownership information the other reasonably needs for its lender, state, and foreign filings — which costs nothing and ends the scramble.
Fifth, deal with the archaeology. Millions of domestic companies filed BOI reports during the 2024 compliance push, and sellers routinely ask what to do about those legacy filings now that the filers are exempt. The practical answer under the interim rule is: nothing — exempt entities have no obligation to update or withdraw reports they were never required to keep current, and there is no un-filing mechanism to run before closing. The filing simply stops mattering, though a careful disclosure schedule can note it for completeness. The related trap runs the other direction: do not let CTA relief bleed into neighboring regimes that are very much alive. FinCEN’s separate reporting rule for certain non-financed transfers of residential real estate to entities and trusts is its own regime on its own timeline, and a Florida closing that happens to involve a homestead, a beach condo in an LLC, or seller financing secured by residential property should be checked against it independently — “the CTA went away” is not an answer to a different rule’s question.
Two cautions before you close the file
One: the interim rule is an agency’s reading, adopted through an interim final rule, of a statute that remains on the books — and agencies can change their minds faster than Congress can legislate. The nonenforcement posture and the narrowed definition are current policy, not constitutional holdings. A buyer building a platform for a five-year hold should treat “domestic entities are exempt” as today’s answer, keep the entity inventory current, and let the rep and the compliance covenant carry the risk of tomorrow’s answer. Two: the CTA’s afterlife includes a scam economy. FinCEN has publicly warned about fraudulent BOI solicitations — fake “Form 4022” mailings, invented agencies, demands for filing fees. Sellers mid-transaction are prime targets, because a letter about “beneficial ownership noncompliance” lands differently on someone whose company is quietly in diligence. The real system charges no filing fee and sends no surprise penalty letters; anything else goes to the shredder, ideally after a screenshot to the deal team.
The Corporate Transparency Act arrived promising to change every closing in America, and it ended up as a narrow foreign-entity rule with excellent name recognition. The professional response is neither nostalgia for the 2024 checklist nor total deletion — it is knowing exactly which entities in the structure were formed where, and letting that fact, rather than the acronym, drive the work.
If you are closing a deal with foreign-formed entities in the ownership chain, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
