In a move hailed by many small business owners, President Trump’s Department of Treasury has eliminated a burdensome rule requiring the disclosure of ownership details.
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This change will spare entrepreneurs from complex paperwork and compliance nightmares, allowing them to concentrate on growing their businesses.
The Financial Crimes Enforcement Network (FinCEN) issued an interim rule removing the requirement for U.S. businesses and citizens to report beneficial ownership information (BOI) under the Corporate Transparency Act.
This liberates them from a once-mandatory process of disclosing sensitive ownership details to the federal government.
The rule now applies solely to “reporting companies” formed under foreign law that register in the U.S.
Foreign entities qualifying as “reporting companies” must submit their BOI to FinCEN by new deadlines.
U.S. entities and their beneficial owners, however, are exempt from such reporting, significantly easing their operational burdens.
Critics argue the exemption undermines the Corporate Transparency Act’s purpose, potentially allowing criminals to exploit these new loopholes.
The U.S. Treasury Department has announced that it will no longer enforce the BOI reporting requirement for U.S. citizens and domestic businesses, suspending penalties or fines for those failing to file the BOI report.
Those reports required companies to share vital information, such as owner names and addresses, towards achieving greater transparency and reducing money laundering risks.
“Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy,” stated Treasury Secretary Scott Bessent.
Legal battles previously challenged the BOI requirement’s legality, creating deadline confusion among business owners.
President Trump’s administration stepped in, with Treasury Secretary Scott Bessent emphasizing removing such hurdles aligns with the administration’s deregulatory approach.
Amidst this, critics stress that the interim rule may allow criminals to evade detection by operating front companies domestically.
U.S. businesses no longer have to comply with the beneficial ownership information (BOI) reporting filing requirements of the Corporate Transparency Act (CTA). https://t.co/OTydLySkeA pic.twitter.com/sZYkwXky1d
— Forbes Investing (@ForbesInvestor) March 24, 2025
The Corporate Transparency Act, enacted in 2021, endeavored to hinder illicit activities by mandating businesses identify their “beneficial owners.”
However, with 32 million small businesses initially poised to report these details, the elimination now draws mixed reviews.
As the Treasury finalizes an emergency regulation to suspend the rule officially, questions linger on the effectiveness of the administration’s approach to balancing business freedom and national security.
As small businesses enjoy a reprieve, legal experts, such as Erin Bryan, argue that this change “absolutely waters down the rule.”
With future implications yet unfolding, the debate continues on whether this deregulatory action will spark innovation or invite potential exploitation.
