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The federal anti-money laundering law that took effect in 2024 — the Corporate Transparency Act — promised the biggest change to U.S. company reporting in decades. It required millions of LLCs and corporations to disclose their beneficial owners to FinCEN. That agency, the Financial Crimes Enforcement Network, sits within the Treasury Department. Since then, however, court challenges and a 2025 rule change have dramatically narrowed who must actually file. This article explains what the law requires today, who remains covered, and what LLC owners should do now.
What the Anti-Money Laundering Law Requires
Congress passed the Corporate Transparency Act in January 2021 as part of the Anti-Money Laundering Act of 2020. Its goal was straightforward: stop criminals from hiding behind anonymous shell companies. Law enforcement had long complained about opaque LLCs formed in minutes with no ownership disclosure. Such shells laundered proceeds of fraud, corruption, and sanctions evasion through U.S. real estate and bank accounts. Starting January 1, 2024, “reporting companies” had to file beneficial ownership information (BOI) reports with FinCEN. These reports identify the human beings who ultimately own or control a company.
A BOI report contains the company’s legal name, trade names, address, jurisdiction of formation, and taxpayer identification number. In addition, it must identify each beneficial owner by name, date of birth, and residential address. Each owner must also supply an identifying document, such as a passport or driver’s license. The statute exempted twenty-three categories of entities, including banks, public companies, and large operating companies. Regulators can already see who stands behind those businesses.
Who Counts as a Beneficial Owner
The anti-money laundering law defines a beneficial owner through two tests. The first covers any individual who owns or controls at least 25 percent of the entity’s ownership interests. The second covers anyone who exercises substantial control over it. Substantial control reaches senior officers, people who can appoint or remove directors, and anyone who directs important decisions. Consequently, a manager of an LLC can qualify even without holding a single membership unit. Trust arrangements, holding companies, and nominee structures do not break the chain; the analysis always runs through to natural persons.
That look-through approach echoes doctrines readers of this blog know well. Courts apply a similar logic when they disregard entities in corporate veil piercing cases. Managers who ignore governance duties likewise face exposure under state law. We discuss that risk in our article on the fiduciary duties of Florida LLC managers.
How Courts Reshaped the Anti-Money Laundering Law
Litigation followed almost immediately. In March 2024, an Alabama federal court held the Act unconstitutional as applied to the plaintiffs before it. Later that year, a Texas district court went further and blocked enforcement nationwide. The injunctions were stayed on appeal, and filing deadlines lurched back and forth for months. As a result, many owners genuinely did not know whether they were required to file.
Exemptions and Common Questions
Even when it applied broadly, the anti-money laundering law never reached every business. The most-used exemption covers large operating companies. These are entities with more than 20 full-time U.S. employees, over $5 million in U.S.-sourced gross receipts, and a physical U.S. office. Regulated entities such as banks, credit unions, insurance companies, and public companies are likewise exempt. So are most tax-exempt organizations and their wholly owned subsidiaries.
Several questions come up repeatedly in practice. Does a single-member LLC have to identify anyone besides its owner? Yes, if another person exercises substantial control, for instance as a manager. Do minors appear on a report? No; the rules allow a parent or guardian to be listed instead. What about companies that dissolved? FinCEN took the position that entities existing on or after January 1, 2024 had obligations. That is one more reason to document wind-downs carefully. Finally, frequent filers can obtain a FinCEN identifier. That unique number substitutes for submitting personal documents with every report.
Where the Rules Stand Now: Foreign Companies Only
In March 2025, FinCEN resolved much of the uncertainty through an interim final rule. Under that rule, domestic reporting companies no longer have to file beneficial ownership reports. That category covers LLCs and corporations formed in the United States. The reporting obligation now falls only on foreign companies that have registered to do business in a U.S. state. Even those entities do not report U.S. persons as beneficial owners. Therefore, the anti-money laundering law now matters most to international structures. A foreign holding company registered in Florida, for example, remains squarely within the rules.
Owners should not treat the story as finished, however. The rulemaking remains subject to comment and revision, appellate litigation has continued, and Congress could amend the statute. Meanwhile, states have begun acting on their own. New York’s LLC Transparency Act took effect on January 1, 2026. It imposes beneficial ownership disclosure for LLCs formed or registered in New York. Similar proposals have appeared in other states, so multistate businesses need to track more than one regime.
Penalties Under the Anti-Money Laundering Law
For companies that remain covered, the stakes are real. Willful failure to report, or willfully filing false information, can trigger civil penalties of hundreds of dollars per day. Criminal fines and up to two years’ imprisonment can follow. Moreover, senior officers can bear personal responsibility for a company’s failure to file. Reporting companies must also correct or update filings within 30 days when ownership or control information changes. Compliance is therefore an ongoing duty rather than a one-time event.
What LLC Owners Should Do Now
- Classify every entity. Determine whether each company in your structure is domestic or a foreign entity registered to do business in a U.S. state.
- File where still required. Foreign reporting companies should confirm their FinCEN filings are complete and current.
- Map beneficial ownership anyway. Banks still collect ownership information under customer due diligence rules, and state laws such as New York’s will demand it.
- Assign responsibility. Name one officer or advisor to monitor FinCEN announcements, court developments, and state legislation.
- Document your analysis. If you conclude no filing is due, record why; a written record is your best defense if regulators later disagree.
Conclusion
The anti-money laundering law of 2024 arrived with sweeping ambitions, and it leaves behind a narrower but still consequential regime. Foreign companies operating in the United States face live federal reporting duties. Domestic LLCs face emerging state-level rules. Moreover, the landscape can shift with the next court decision or rulemaking. Transnational Matters advises U.S. and foreign clients on entity structuring, compliance, and cross-border disputes. Contact our Miami office to review what the current rules mean for your companies.
Anti-money laundering compliance raises practical questions for LLC owners about reporting duties and recordkeeping. Contact our team to talk through how these rules may affect your company.
