Co-op and Condo Boards Exempted from Corporate Transparency Act

At long last, New York City co-op and condo boards can stop worrying about the Corporate Transparency Act (CTA).

The U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) has issued an "interim final rule" that exempts U.S. companies and U.S. individuals from the law's required reporting of their beneficial ownership information. Under the new rule, according to a FinCEN press release, "only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. state or tribal jurisdiction" will be required to report their beneficial ownership information to the federal government. U.S individuals connected to a foreign company will be exempt from filing beneficial ownership information. 

As originally written, the CTA required more than 32 million businesses, including co-op and some condo board directors, to submit beneficial ownership information to the Treasury Department by Jan. 1, 2025. (“Beneficial owners” are defined as people who ultimately own 25% or more of the company, or exercise significant control over it.) The law was intended to bring greater transparency to limited liability companies in an effort to combat money laundering, fraud, tax evasion and other financial crimes.

The estimated number of foreign companies that will be required to report is now slightly less than 12,000 — a staggering shrinkage of the law's original reach. The interim rule follows tangled litigation that paused implementation of the CTA, plus a March 2025 executive order from President Donald Trump directing federal agencies to reduce regulatory burdens. Treasury now estimates this rollback could save companies nearly $9 billion annually in compliance costs.

Among those enjoying the savings will be New York City's newly exempt co-op and condo boards.