The Corporate Transparency Act’s (CTA) Beneficial Ownership Information (BOI) mandate is at a standstill once again. On March 1, 2025, authorities suspended all domestic BOI reporting for U.S. businesses. They expect to pass an Emergency Regulation to formally suspend the reporting at a later date.
What this article answers:
- What was the purpose of the Corporate Transparency Act’s BOI reporting?
- What is the current state of BOI reporting for foreign and domestic companies?
- How have BOI reporting requirements changed over the last year?
What was the purpose of the Corporate Transparency Act’s BOI reporting?
Congress passed the Corporate Transparency Act (CTA) as part of the 2021 National Defense Authorization Act, and it went into effect on January 1, 2024. It sought to crack down on “ghost” or fraudulent companies used for money laundering, tax evasion, and other illicit activities. To prevent these illicit activities, the CTA required certain entities to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.
The reporting requirements of the CTA were obligatory to approximately 30 million U.S. businesses, including a large number of small businesses, mid-sized businesses, startups, and privately held companies. Noncompliance could result in fines, upwards of $500 per day.
What is the current state of BOI reporting for foreign and domestic companies?
- The government has suspended BOI reporting requirements for all domestic U.S. entities.
- Foreign individuals and entities must still adhere to BOI reporting requirements via FinCEN.
- The Treasury Department is encouraging voluntary compliance with BOI reporting and is actively seeking the public’s input to positively refine the regulations.
Timeline: How have BOI reporting requirements changed over the last year?
January 1, 2024 – The Corporate Transparency Act (CTA) was originally enacted on January 1, 2021, as part of the National Defense Authorization Act (NDAA) for Fiscal Year 2021. It became law after Congress overrode then-President Donald Trump’s veto of the NDAA. Although Congress enacted the CTA in 2021, BOI reporting didn’t take effect until January 1, 2024. Businesses had until January 1, 2025 to submit the necessary documents to FinCEN.
December 3, 2024 – The US District Court for the Eastern District of Texas issued a nationwide preliminary injunction temporarily halting the enforcement of the Corporate Transparency Act (CTA) and related deadlines, including the January 1, 2025 BOI reporting deadline to FinCEN
February 18th, 2025 – The U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.) ruled that beneficial ownership information (BOI) reporting requirements through FinCEN under the Corporate Transparency Act (CTA) are mandatory.
March 1, 2025 – The U.S. Treasury Department suspends all BOI reporting, possibly indefinitely. “This is a victory for common sense,” said U.S. Secretary of the Treasury Scott Bessent. President Trump has called the regulation both outrageous and invasive, and considers the suspension a win for the American people.
The dance of BOI reporting underscores the ongoing debate between enhancing corporate transparency and safeguarding individual privacy. Business owners are advised to stay informed about further regulatory updates and participate in the public consultation process to ensure that their perspectives are considered in shaping the final framework of the CTA’s implementation. For more information on the CTA, or on foreign BOI filing requirements, contact LPJ legal.
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