The beneficial-ownership exemption is now final, and FinCEN said a separate HOA carve-out is unnecessary because the blanket one covers them
The beneficial-ownership exemption is now final, and FinCEN said a separate HOA carve-out is unnecessary because the blanket one covers them
2026-09-19 · South Carolina · Compliance
The Corporate Transparency Act filing question that consumed community-association boards through late 2024 is now closed by final rule, and the rule addresses homeowners associations by name.
The rule
"Beneficial Ownership Information Reporting Requirement Revision," FinCEN, final rule, 91 FR 52508, published and effective August 14, 2026, amending 31 CFR 1010.380.1
It exempts United States persons from providing beneficial ownership information as beneficial owners, exempts reporting companies from submitting US-person company-applicant information, and exempts all US persons from updating information tied to a FinCEN identifier. It finalises the March 26, 2025 interim final rule, adopted with changes.
Only entities formed outside the United States and registered to do business in a State or Tribal jurisdiction still report.
Where associations appear in the rule
Commenters asked FinCEN for a narrow carve-out specifically for homeowners associations. FinCEN declined as unnecessary, writing:
The final rule therefore adopts the blanket exemption approach of the IFR. This approach obviates any need to create additional exemptions applicable to subcategories of U.S. entities, such as homeowners' associations.
The reasoning matters as much as the outcome: associations are not exempt by a special rule that could be revisited on its own terms. They are exempt because every domestic entity is.
What this means in South Carolina
Every South Carolina community association is a domestic entity — typically a nonprofit corporation filed with the Secretary of State, or an unincorporated association formed here. The blanket domestic exemption therefore covers the entire state without exceptions.
No South Carolina association has a federal beneficial-ownership filing obligation, and no deadline is running.
The sequence that produced the confusion
The reversals are worth setting out, because they explain why so many boards still believe a filing is owed:
- The Corporate Transparency Act's reporting regime was to take effect with a January 1, 2025 deadline for existing entities. Management companies and law firms prepared beneficial-ownership reports through late 2024, and many associations paid for that work.
- Litigation followed. The rule's preamble recites Texas Top Cop Shop, Inc. v. Garland, 758 F. Supp. 3d 607 (E.D. Tex. Dec. 3, 2024), stayed by the Supreme Court in McHenry v. Texas Top Cop Shop, Inc., 145 S. Ct. 1 (2025); Smith v. U.S. Department of the Treasury, 761 F. Supp. 3d 952 (E.D. Tex. 2025); and National Small Business United v. Yellen, 721 F. Supp. 3d 1260 (N.D. Ala. 2024), reversed and remanded.
- Treasury announced on March 2, 2025 that it would not enforce against domestic companies.
- The interim final rule of March 26, 2025, 90 FR 13688, exempted domestic entities.
- The final rule of August 14, 2026 makes that permanent.
A board that filed in 2024, or that paid a professional to prepare a filing, spent money on an obligation that no longer exists. Nothing is owed back, and nothing further is owed.
What a board can stop doing
The reporting regime as originally designed carried a continuing obligation, not a one-off: updated reports within 30 days of a change in beneficial ownership. For an association with annual board turnover, that would have meant a filing every time the board changed.
That ongoing obligation does not exist. There is no annual or event-driven federal beneficial-ownership update for a South Carolina association, and no reason to carry a line for it in a budget.
The one residual case is an association that somehow holds an interest through an entity formed outside the United States, which is rare in this context.
What South Carolina requires instead, which is not much
South Carolina nonprofit corporations, domestic and foreign, do not file an annual report with the Secretary of State. The Secretary of State's business entity search is what the Department of Consumer Affairs directs homeowners to when they want to know whether their association is in fact incorporated — a question that matters because the Nonprofit Corporation Act applies only to associations that filed articles of incorporation.
That distinction runs through South Carolina association law. It determines whether the Act's voting and document-access provisions apply, whether the 48-hour budget notice in Section 27-30-140 applies — it expressly does not apply to incorporated associations — and whether a court-supervised route around a unanimity requirement is available, as it was in one unpublished 2025 decision.
A separate bill this term, H. 5204, would have required every South Carolina association to be incorporated and registered with the state and to pay a $3-per-unit annual fee. It died in committee, and that fee is now circulating as though it were law.
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