The Corporate Transparency Act in 2026: What Business Owners Still Need to Know

If you formed an LLC or corporation and heard that federal beneficial ownership reporting went away, that's true as far as it goes — but it understates how unsettled the picture still is. The exemption covering domestic companies comes from a regulation, not a change to the underlying statute, and the law behind it is still being litigated.

What Is the Corporate Transparency Act?

The Corporate Transparency Act (CTA) is a federal law enacted in 2021 as part of the Anti-Money Laundering Act, aimed at making it harder to hide ownership of a company behind anonymous shell entities. It directs certain companies, called “reporting companies,” to disclose identifying information about their beneficial owners, meaning individuals who own 25% or more of the company or who exercise substantial control over it, to the Treasury Department's Financial Crimes Enforcement Network (FinCEN). The reporting obligation itself took effect January 1, 2024.

Who Originally Had to File?

As written, the CTA's reach was broad. A “reporting company” included nearly any corporation, LLC, or similar entity created by filing paperwork with a secretary of state (a “domestic reporting company”), plus foreign entities registered to do business in the United States (a “foreign reporting company”), subject to a set of narrow exemptions for banks, large operating companies, and a handful of other regulated industries. Under that original scope, many Michigan LLCs and corporations were legally required to file.

What Changed in March 2025

On March 21, 2025, FinCEN announced, and on March 26, 2025 formally published, an interim final rule that removes the beneficial ownership reporting requirement for U.S. companies and U.S. persons entirely. The rule redefines “reporting company” to mean only entities formed under foreign law that are registered to do business in a U.S. state or tribal jurisdiction. Every entity formed in the United States, including a Michigan LLC or corporation, along with its beneficial owners, is now exempt from filing.

Is the Beneficial Ownership Reporting Exemption Permanent?

Not necessarily, and this is the part worth taking seriously. FinCEN's exemption is an interim final rule, not a final rule, and FinCEN has indicated a final rule is still expected sometime in 2026 that could adjust or narrow what the interim rule currently covers.

The broader constitutional fight over the CTA is still unsettled. In March 2024, a federal judge in Alabama ruled in National Small Business United v. Yellen that Congress had exceeded its constitutional authority by passing the law. The Eleventh Circuit reversed that decision on December 16, 2025, finding that the CTA was a valid exercise of Congress’s power to regulate interstate commerce and did not, on its face, violate the Fourth Amendment.

The plaintiffs asked the Supreme Court to review that ruling on April 15, 2026. The case is now called National Small Business United v. Bessent, No. 25-1201. Plaintiffs in a related case, Texas Top Cop Shop, Inc. v. Blanche, No. 25-1290, filed their own petition on May 6, asking the Court to hear the two cases together. As of July 23, 2026, the Court had not decided whether to take either case.

For now, FinCEN regulations exempt domestic companies and U.S. persons from the CTA’s reporting requirements, which limits the law’s immediate practical effect. But the statute remains on the books, and the Supreme Court has not resolved the underlying constitutional questions.

The current exemption for domestic companies rests on a regulation FinCEN could revise, not a permanent change to the statute. Business owners relying on it should treat it as the current rule, not a settled outcome.

Does a State-Level Disclosure Law Change Anything?

Not for Michigan LLCs, at least under the one state law that has drawn the most attention. New York's LLC Transparency Act took effect January 1, 2026 and originally appeared to require beneficial ownership disclosure from LLCs formed or registered to do business in New York. On December 31, 2025, the New York Department of State clarified that the law applies only to LLCs formed outside the United States that are authorized to do business in New York. A Michigan LLC registering to do business in New York is a domestic entity and falls outside that requirement as it currently stands.

That said, this is a state-by-state question, not a settled federal one. A business registered in multiple states should check each state's own disclosure requirements separately from its federal CTA status, since a future state law could be drafted more broadly than New York's turned out to be.

What Michigan Business Owners Should Do Now

For a company formed in Michigan with no foreign registration, there is currently no beneficial ownership report to file with FinCEN. That said, a few practical points follow from how unsettled the underlying rule still is:

• Ownership records — keep membership percentages and control changes documented internally, even though nothing has to be filed with FinCEN today.
• FinCEN's expected final rule — watch for the 2026 rule that could formalize, narrow, or otherwise revise the current interim exemption.
• Foreign registration status — if the company is registered to do business in another country, or a foreign entity is registered to do business in Michigan or elsewhere in the U.S., CTA filing obligations may still apply.
• State-specific rules — confirm the requirements in every state where the business operates, rather than assuming the federal exemption or New York's narrowed approach controls elsewhere.

Questions like these come up regularly in the firm's Michigan business formation and compliance work, and they are worth resolving well before an actual filing deadline is on the table.

Frequently Asked Questions

What is the Corporate Transparency Act?

The Corporate Transparency Act is a federal law, part of the 2021 Anti-Money Laundering Act, requiring certain companies to report identifying information about their beneficial owners, meaning individuals who own 25% or more of the company or exercise substantial control over it, to the Treasury Department's Financial Crimes Enforcement Network (FinCEN).

Does my Michigan LLC need to file a beneficial ownership report with FinCEN right now?

No. Under FinCEN's interim final rule published March 26, 2025, all companies formed in the United States, including Michigan LLCs and corporations, and their beneficial owners are exempt from Corporate Transparency Act reporting. Only entities formed under foreign law that are registered to do business in a U.S. state still have to file.

Who still has to file beneficial ownership information with FinCEN?

Only entities formed under the law of a foreign country that have registered to do business in a U.S. state or tribal jurisdiction. These foreign reporting companies do not need to report any U.S. persons as beneficial owners.

Is the exemption for domestic companies permanent?

Not yet confirmed as permanent. It rests on an interim final rule, not a final rule or a statute, and FinCEN has indicated a final rule is expected sometime in 2026. Litigation over the CTA's constitutionality is also still pending: the Eleventh Circuit upheld the law in December 2025, and the challengers petitioned the U.S. Supreme Court for review in April 2026.

Does New York's LLC Transparency Act apply to my Michigan LLC if I register to do business there?

As of a New York Department of State clarification issued December 31, 2025, no. The law was narrowed to apply only to LLCs formed outside the United States that are authorized to do business in New York. A Michigan LLC registering to do business in New York is a domestic entity and falls outside that requirement.

What should a Michigan business owner do given how much this has changed?

Keep beneficial ownership and formation records current internally even though no filing is currently required, watch for FinCEN's expected 2026 final rule, and check separately for any state-level beneficial ownership disclosure law in every state where the business is registered, since the federal exemption does not control state requirements.

This is a federal rule that has moved twice in two years and is currently sitting in front of the Supreme Court on a certiorari petition. A Michigan business owner is not wrong to feel like the ground keeps shifting under this particular requirement, and treating today's exemption as the final word would be premature.

Please note: This article is provided for general educational and informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship between you and the Law Offices of Maynard F. Newman, P.L.L.C. This area of law is changing quickly and every situation is different; you should consult a qualified attorney, or check FinCEN's own guidance at fincen.gov/boi, before relying on any exemption described here. This content may also be considered attorney advertising.