The short answer
The Corporate Transparency Act still exists — it was upheld as constitutional in December 2025 — but it has been narrowed by regulation rather than repealed. FinCEN's March 2025 interim rule exempted every U.S.-formed company and every U.S. person, cutting the beneficial-ownership registry from an expected 32.6 million filers to roughly 20,000. In 2026, no public registry is a reliable primary source on who owns a company.
What the CTA was meant to do — and what is left of it
The Corporate Transparency Act was enacted on 1 January 2021 as part of the National Defense Authorization Act for FY2021, and it was, on paper, the most consequential corporate-transparency measure in modern U.S. history. FinCEN finalised the implementing reporting rule in September 2022, with obligations taking effect on 1 January 2024. The regulatory impact analysis behind that rule identified 32,556,929 existing reporting entities, plus roughly five million new companies expected to file an initial report every year thereafter. For the first time, the people behind American shell companies were supposed to be on file.
That is not what exists today. On 21 March 2025, FinCEN issued an interim final rule redefining a "reporting company" to mean only entities formed under the law of a foreign country and registered to do business in a U.S. state or tribal jurisdiction. Every company created in the United States was exempted, along with every U.S. person — and foreign reporting companies are not required to report beneficial owners who are U.S. persons.
The scale of that change is not a matter of interpretation. In a report published on 29 May 2026, the Government Accountability Office found the exemption removed reporting obligations from more than 99 percent of the entities previously covered, leaving a registry that expects roughly 20,000 filers and about 5,000 new reporting companies a year. GAO recommended that Treasury address the resulting gap in ownership information. Treasury declined.
The registry was never complete, even at its peak
It is worth being precise about the baseline, because the rollback is often discussed as though it dismantled a functioning system. It did not. The system was still filling up when it was suspended.
GAO reported that FinCEN officials put the number of companies that had filed beneficial-ownership reports at more than six million as of 29 October 2024 — against the 32.6 million ultimately expected. That is roughly one in five. Filings were still arriving in volume when enforcement was suspended in early 2025, and FinCEN has never published a final total.
The practical consequence for anyone running diligence is that the registry was never a complete answer, and is now not even a partial one for domestic entities. A search that returns nothing tells you almost nothing: the company may have no reportable owners, may have been exempted, or may simply never have filed. Absence of a record is not evidence of absence — a distinction that matters enormously when the record is the thing you were relying on.
It was not struck down — it was narrowed by regulation
The most common misreading of the last two years is that courts killed the CTA. They did not, and the distinction matters for anyone trying to plan around what comes next.
The litigation was real. In March 2024, a federal district court in Alabama held in National Small Business United v. Yellen that the CTA exceeded Congress's enumerated powers, enjoining enforcement as to the plaintiffs. In December 2024, the Eastern District of Texas issued a nationwide preliminary injunction in Texas Top Cop Shop, Inc. v. Garland; the Supreme Court granted the government's application to stay that injunction in January 2025. But on 16 December 2025, the Eleventh Circuit reversed the Alabama decision, holding that the CTA is a constitutional exercise of Congress's Commerce Clause power and does not facially violate the Fourth Amendment.
So the statute survived its constitutional challenge and was then narrowed by the executive branch. The registry shrank by regulation, not by judicial invalidation — and the underlying law remains on the books. That is a materially different situation from repeal, because a rule can be revised far more easily than a statute can be re-enacted.
Still unsettled: an interim rule, more than a year on
The March 2025 rule was an *interim* final rule, issued with a comment period that closed in May 2025. FinCEN indicated a final rule would follow by the end of 2025. It did not. As of this writing the interim rule is still the operative one; a final rule reached the Office of Information and Regulatory Affairs for review on 5 June 2026 and had not been published.
Congress has moved in the same direction without arriving anywhere. In April 2026 the House Financial Services Committee narrowly advanced H.R. 425, which would limit beneficial-ownership reporting to foreign-owned entities, broadly codifying FinCEN's current posture; a Senate bill introduced the same month would delete previously collected U.S.-person data. Advancing out of committee is not enactment, and neither measure has become law.
For a general counsel or compliance officer, the uncertainty is itself the planning problem. The current scope is set by an interim rule that could be replaced, and reporting suggests the forthcoming final rule may not simply codify it. Building a diligence process that assumes today's exemptions are permanent is as unwise as assuming they will be reversed. The durable response is a process that does not depend on the registry either way.
The real-estate channel closed at the same time
The second place investigators looked for beneficial ownership was residential real estate, and that route narrowed on almost the same timeline. Since 2016, FinCEN's Geographic Targeting Orders had required title companies to identify the natural persons behind shell companies in non-financed home purchases — a program that began as a two-market pilot in Manhattan and Miami-Dade and expanded across major metros, most recently at a $300,000 threshold. Those orders ran through 28 February 2026.
They expired because a permanent successor was arriving: FinCEN's Residential Real Estate Rule, finalised in August 2024 and — after a postponement — effective 1 March 2026, requiring reports on non-financed transfers of residential property to entities and trusts nationwide. Eighteen days later, on 19 March 2026, the Eastern District of Texas vacated that rule in its entirety in Flowers Title Companies, LLC v. Bessent, holding FinCEN had exceeded its authority under the Bank Secrecy Act by treating all non-financed residential transfers as categorically suspicious.
FinCEN filed a notice of appeal to the Fifth Circuit on 11 May 2026, and that appeal is pending. In the meantime the agency's own guidance confirms that reporting persons are not currently required to file Real Estate Reports while the vacatur stands. The result is that the entity-held, all-cash residential purchase — the single channel U.S. authorities have most consistently identified as a laundering risk, and a defining feature of markets like South Florida — currently sits outside an operative federal beneficial-ownership reporting framework.
Abroad, access narrowed too — with one exception
It would be convenient to treat this as a purely American problem and rely on foreign registers instead. That does not work either, because Europe moved first and in the same direction.
On 22 November 2022, the Court of Justice of the European Union, in the joined Luxembourg Business Registers and Sovim cases, declared invalid the anti-money-laundering provision guaranteeing that beneficial-ownership information be accessible in all cases to any member of the general public, holding it a disproportionate interference with the privacy and data-protection rights in the EU Charter. It is worth being precise: the Court did not abolish the registers, nor restrict access by competent authorities and regulated firms — it struck down guaranteed public access. Several member states nonetheless suspended public access outright. The EU's 2024 anti-money-laundering package restores access on a narrower "legitimate interest" basis, expressly including journalists and civil-society organisations, with most of the new regime applying from 10 July 2027.
The United Kingdom is the instructive counter-example. Rather than reducing collection, it moved toward verifying it: under the Economic Crime and Corporate Transparency Act 2023, identity verification at Companies House became mandatory for new directors and persons with significant control from 18 November 2025, with existing directors required to verify by a longstop of 18 November 2026 — an estimated six to seven million individuals. The contrast is stark. One jurisdiction is checking that the names on file are real; another has stopped collecting most of them.
What this means for diligence in practice
The operating conclusion is straightforward, if uncomfortable: in 2026 no public registry — American or European — is a reliable primary source for who ultimately owns a company. A registry search remains a necessary first step and a useful corroborator. It is no longer an answer.
Ownership therefore has to be established the way it was before the CTA promised otherwise: investigatively. That means correlating corporate filings across jurisdictions; reading the documents entities produce for other purposes — litigation exhibits, financing statements, regulatory and licensing filings, procurement records; mapping property and asset holdings; analysing the timing of incorporations and transfers against the events in a transaction; and identifying nominee patterns, where the same handful of names sit atop unrelated companies. It is the same discipline that underpins piercing ownership in a cross-border asset trace, applied before a deal rather than after a loss.
For deal teams, three practical adjustments follow. Stop treating a clean registry search as a cleared diligence item, and record what it did and did not establish. Budget for ownership work on any counterparty where control actually matters — before you sign, not after. And where a counterparty is foreign-formed or the funds cross a border, treat it as international due diligence from the outset, because that is now the one category the U.S. registry still reaches. This is the substance of investigative due diligence and corporate intelligence — and in a period when the public record is contracting, it is what the record no longer does for you.
Key takeaways
- The CTA was not repealed or struck down — the Eleventh Circuit upheld its constitutionality in December 2025. It was narrowed by regulation, which means it can change again.
- FinCEN's March 2025 interim rule exempted all U.S.-formed companies and all U.S. persons; GAO found in May 2026 that this removed more than 99% of covered entities, leaving roughly 20,000 expected filers instead of 32.6 million.
- The registry was never complete anyway — just over six million of an expected 32.6 million entities had filed as of late October 2024, so an empty search result proves very little.
- The scope is still governed by an interim rule; a final rule was at OMB review as of June 2026 and unpublished, so today's exemptions should not be assumed permanent in either direction.
- With the residential real-estate rule vacated in March 2026 and EU public register access restricted since 2022, ownership in 2026 must be established investigatively — a registry search is a corroborator, not an answer.
Frequently asked
Is the Corporate Transparency Act still in effect in 2026?
Yes. The statute remains law and the Eleventh Circuit upheld its constitutionality in December 2025. What changed is its regulatory scope: FinCEN's March 2025 interim final rule exempted all companies formed in the United States and all U.S. persons, so only entities formed abroad and registered to do business in a U.S. state are currently required to report beneficial ownership — and even they need not report U.S.-person owners.
Who has to file a beneficial ownership report now?
Under the interim final rule currently in force, only "foreign reporting companies" — entities formed under the law of a foreign country that have registered to do business in a U.S. state or tribal jurisdiction. Domestic U.S. companies are exempt. Foreign reporting companies are not required to report beneficial owners who are U.S. persons. Because this is an interim rule with a final rule still pending, the scope could change.
How much smaller is the beneficial-ownership registry after the rollback?
Dramatically. FinCEN's original analysis identified about 32.6 million existing reporting entities plus roughly five million new ones a year. The interim rule reduced that to approximately 20,000 reporting entities, with about 5,000 new filers annually. The Government Accountability Office characterised the change in May 2026 as exempting more than 99 percent of entities that previously had to report.
Was the CTA ruled unconstitutional?
A district court in Alabama so held in March 2024 in National Small Business United v. Yellen, but that decision was reversed. On 16 December 2025 the Eleventh Circuit held the CTA is a constitutional exercise of Congress's Commerce Clause power and does not facially violate the Fourth Amendment. A separate nationwide injunction from a Texas court was stayed by the Supreme Court in January 2025. The narrowing of the CTA came from regulation, not from the courts.
What happened to FinCEN's residential real-estate reporting rule?
It took effect on 1 March 2026 and was vacated nationwide eighteen days later, on 19 March 2026, in Flowers Title Companies, LLC v. Bessent, on the ground that FinCEN exceeded its Bank Secrecy Act authority. FinCEN appealed to the Fifth Circuit on 11 May 2026 and that appeal is pending; its guidance confirms that Real Estate Reports are not currently required while the vacatur stands. The Geographic Targeting Orders the rule was meant to replace had run through 28 February 2026.
Can we rely on European beneficial-ownership registers instead?
Not as a primary source. The Court of Justice of the EU invalidated guaranteed general-public access to those registers in November 2022, and several member states suspended public access. The EU's 2024 anti-money-laundering package restores access on a narrower "legitimate interest" basis, with most of the regime applying from 10 July 2027. Competent authorities and regulated firms retain access, but an outside party cannot assume open lookup.
So how do you actually establish who owns a company now?
Investigatively, by corroboration rather than lookup: correlating filings across jurisdictions; reading documents produced for other purposes such as litigation exhibits, financing statements, and licensing records; mapping property and asset holdings; testing the timing of incorporations and transfers against transaction events; and identifying nominee patterns. No single document usually settles it — it is the weight of correlated detail until the real party's control is the only explanation that fits.
What should our deal team change in response?
Three things. Stop treating a clean registry search as a completed diligence item and document what it did and did not establish. Budget for genuine ownership work on any counterparty where control matters, before signing rather than after a problem. And treat foreign-formed counterparties or cross-border funds as international due diligence from the outset — that is the one category the U.S. registry still covers.
Sources & further reading
- GAO-26-107967 — Corporate Transparency: Treasury Should Address Gaps in Ownership Information Resulting from Expanded Exemptions (29 May 2026) — The Government Accountability Office found FinCEN's expanded exemptions removed reporting obligations from more than 99 percent of previously covered entities — leaving roughly 20,000 expected filers against an original 32,556,929 — and reports that Treasury declined its recommendation to address the resulting gap.
- FinCEN — Beneficial Ownership Information Reporting Requirements, interim final rule (21 March 2025; 90 Fed. Reg., 26 March 2025) — Redefined "reporting company" to cover only entities formed abroad and registered to do business in a U.S. state, exempting all domestic companies and U.S. persons; foreign reporting companies need not report U.S.-person beneficial owners. Still the operative rule; a final rule was under OMB review as of June 2026.
- GAO-25-107403 — Illicit Finance: Treasury's Initial Safeguards for Allowing Access to Information on Corporate Ownership (Feb. 2025) — Reported that more than six million companies had filed beneficial-ownership reports as of 29 October 2024, against the 32.6 million ultimately expected — evidence the registry was materially incomplete even before the rollback.
- National Small Business United v. U.S. Dep't of the Treasury, No. 24-10736 (11th Cir., 16 Dec. 2025) — Reversed the 2024 district-court ruling and held the Corporate Transparency Act a constitutional exercise of Congress's Commerce Clause power that does not facially violate the Fourth Amendment — confirming the statute survived its constitutional challenge.
- Texas Top Cop Shop, Inc. v. Garland (E.D. Tex., Dec. 2024); McHenry v. Texas Top Cop Shop, No. 24A653 (U.S., 23 Jan. 2025) — A nationwide preliminary injunction against CTA enforcement, stayed by the Supreme Court in January 2025; related appellate proceedings have since been held in abeyance pending FinCEN's final rule.
- Flowers Title Companies, LLC v. Bessent (E.D. Tex., 19 Mar. 2026); FinCEN notice of appeal (11 May 2026) — Vacated FinCEN's Residential Real Estate Rule nationwide eighteen days after it took effect, holding the agency exceeded its Bank Secrecy Act authority; FinCEN's appeal to the Fifth Circuit is pending and its guidance confirms Real Estate Reports are not currently required.
- CJEU, Joined Cases C-37/20 & C-601/20 (WM and Sovim SA v. Luxembourg Business Registers, 22 Nov. 2022); EU AML package, Reg. (EU) 2024/1624 and Dir. (EU) 2024/1640 — Invalidated the guarantee of general-public access to EU beneficial-ownership registers as a disproportionate interference with Charter privacy rights; the 2024 package restores access on a "legitimate interest" basis, with most provisions applying from 10 July 2027.
- UK Economic Crime and Corporate Transparency Act 2023; Companies House identity verification — Identity verification became mandatory for new directors and persons with significant control from 18 November 2025, with existing directors required to verify by 18 November 2026 — an estimated six to seven million individuals, and the clearest counter-example to the U.S. direction of travel.