The Financial Crimes Enforcement Network announced that entities created in the U.S. and their beneficial owners are now exempt from the requirement to report Beneficial Ownership Information (BOI) to FinCEN, alleviating a regulatory burden many business owners found onerous.
The scope of reporting requirements under the Corporate Transparency Act now focuses exclusively on foreign entities and their beneficial owners.
Background On the Corporate Transparency Act
Enacted in 2021, the CTA aimed to enhance financial transparency by requiring corporations, limited liability companies and other similar entities to report their beneficial ownership information to FinCEN. The primary goal was to combat illicit activities such as money laundering and the use of anonymous shell companies. However, the implementation faced criticism from small business advocates who argued that the reporting requirements were overly invasive and posed privacy concerns.
Treasury Department's Announcement
In an announcement, Treasury Secretary Scott Bessent characterized the suspension as "a victory for common sense," aligning with the Trump administration's broader agenda to reduce regulatory burdens on small businesses. He emphasized that this move supports American entrepreneurs by eliminating unnecessary compliance obligations.
The Treasury Department further clarified that it will not impose penalties or fines on U.S. citizens, domestic reporting companies or their beneficial owners for non-compliance with the BOI reporting requirements.
Implications for Business Owners
For beneficial owners of companies created in the U.S., this development means that the immediate obligation to file beneficial ownership information has been lifted.
You can read the full announcement from FinCEN here.
Need Help?
If you have questions related to the Corporate Transparency Act, please contact your attorney.
