In a recent regulatory shift, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) recently announced an interim final rule that removes the requirement for U.S.-based companies and persons to report Beneficial Ownership Information (BOI) under the Corporate Transparency Act (CTA). This change marks a notable development in how businesses are classified and regulated, and it has important implications for business owners.

To better understand the history of this update, it’s helpful to know what the Corporate Transparency Act was intended to do. Enacted in 2021, the CTA required certain entities, primarily small corporations and LLCs, to report the identities of their beneficial owners. The goal was to increase transparency and combat illicit activity such as money laundering and tax evasion. Beneficial owners are individuals who ultimately own or control a company, even if their name doesn’t appear in official records.

Previously, the rule applied to nearly all U.S. legal entities unless they met specific exemptions. Businesses were required to submit BOI reports to FinCEN or face steep penalties for noncompliance. However, under the new interim rule issued in March 2025, FinCEN has revised the definition of a “reporting company” to include only foreign entities that register to do business in the United States through a state filing. In other words, U.S. companies created domestically and owned by U.S. citizens are now exempt from BOI reporting obligations.

This regulatory change simplifies compliance for a vast number of small to mid-sized U.S. businesses. For entrepreneurs and family-owned companies, the change represents relief from an administrative burden and reduces potential legal trouble stemming from reporting requirements.

However, this doesn’t mean business owners should be any less diligent about maintaining accurate and transparent records. The CTA may evolve again, and different federal or state-level regulations could emerge. In the meantime, this is a good reminder to reassess your business structure, ensure corporate documents are up to date, and review estate planning strategies that may be tied to your business ownership.

For example, it’s essential to consider how changes in federal reporting laws could affect your succession strategy, tax planning, and privacy if you are a business owner. While you may no longer be required to submit beneficial ownership information to FinCEN, keeping clear records of ownership, management roles, and successor designations is still crucial for both compliance and legacy planning.

At The Estate Planning & Legacy Law Center, we encourage clients to view these regulatory changes as a reminder to keep estate and business plans aligned. A proactive approach ensures that your business continues to support your long-term goals, whether that includes transferring ownership to the next generation or minimizing tax liability.

If you’re unsure how these updates may affect your existing plans or want to explore business succession options, we’re here to help. Let’s ensure your legacy is protected, contact us today!