As described in our previous blog posts, Beneficial Ownership Information (BOI) reporting is a feature of the 2021 bipartisan Corporate Transparency Act, requiring companies doing business in the U.S. to identify the individuals who own or control them in an effort to "curb illicit finance."

However, since its inception, the Corporate Transparency Act (CTA) has faced headwinds, including legal challenges and constitutionality issues, enforcement and compliance challenges, political and legislative push-back, and data privacy and effectiveness concerns.

Significant developments have recently occurred regarding BOI filings with the Financial Crimes Enforcement Network (FinCEN) in the United States.  These developments include the following:

1.     Suspension of Enforcement and Penalties: On February 27, 2025, FinCEN announced it would not impose fines, penalties, or take enforcement actions against companies failing to file or update BOI reports by existing deadlines. This suspension will remain until a forthcoming interim final rule becomes effective, establishing new reporting deadlines. ​

2.     Proposed Narrowing of Reporting Requirements: On March 2, 2025, the U.S. Department of the Treasury stated its intention to revise BOI reporting rules, proposing that only certain foreign companies registered to do business in the U.S. be required to submit BOI information. This shift, directed by the Trump administration, aims to reduce regulatory burdens on domestic businesses.

3.     Ongoing Legal Developments: The CTA, which mandates BOI reporting, has faced several legal challenges. Notably, among other challenges, on March 3, 2025, the U.S. District Court for the Western District of Michigan declared the CTA unconstitutional, citing violations of the Fourth Amendment's prohibition on unreasonable searches and seizures. ​

Impact on Small Businesses. These recent changes have been welcomed by small business advocates, who previously expressed concerns about the compliance complexities and financial burdens associated with BOI reporting.   Privacy advocates have also welcome these new developments.  

Counterpoint:  The Benefits of a Centralized Database.   According to former Treasury Secretary Janet I. Yellen, “Corporate anonymity enables money laundering, drug trafficking, terrorism, and corruption.   Having a centralized data base of beneficial ownership information will eliminate critical vulnerabilities in our financial system and allow us to tackle the scourge of illicit finance enable by opaque corporate structures.”   Law enforcement, anti-corruption groups, financial institutions and compliance experts were also in favor of BOI reporting. 

Where things stand as of March 3, 2025.    BOI reporting requirements are currently suspended for most U.S. businesses, pending the issuance of new regulations. Companies are advised to stay informed about forthcoming rule changes to ensure compliance once new guidelines are established.   That said, with enforcement paused, ongoing litigation, and growing political opposition under the Trump administration, the future of the CTA remains uncertain. While some form of beneficial ownership reporting may persist, regulatory revisions or legislative amendments will likely narrow the scope of compliance and/or limit enforcement mechanisms.

The Law Office of Jennifer M. Settles helps companies understand their Corporate Transparency Act reporting obligations, and counsels companies on other governance and compliance topics.     Contact us today at (602) 617-3938 or through our website at www.jsettleslaw.com, for more information.  

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