Small Business Guide to the Corporate Transparency Act – 2025 Update

2025 Update

As discussed in our previous guide on the updated requirements for reporting, the Corporate Transparency Act (CTA) was enacted to combat money laundering, terrorism financing, and other illicit activities by requiring certain business entities to disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). However, recent developments have significantly altered the implementation and enforcement of the CTA's beneficial ownership information (BOI) reporting requirements.

On March 4, 2025, the U.S. Department of the Treasury announced a major shift in its approach to the Corporate Transparency Act. The Treasury Department stated that it will not enforce any penalties or fines associated with the CTA's beneficial ownership information reporting rule under the existing regulatory deadlines. Furthermore, once the forthcoming rule changes take effect, the Treasury will not enforce any penalties or fines against U.S. citizens, domestic reporting companies, or their beneficial owners.

Deemed as, “...a victory for common sense", according to U.S. Secretary of the Treasury Scott Bessent, the move is part of President Trump's broader agenda to support American small businesses by reducing regulatory burdens. The previous requirement for businesses to disclose beneficial ownership information to the government also raised concerns about how sensitive data would be stored, used, and protected.

What Does This Mean for Small Businesses?

Moving Forward

Here's what you need to know if you own or manage a small business that would have been subject to the CTA's reporting requirements:

1. No Penalties for Non-Compliance: Businesses will not face fines or other penalties for failing to meet the previous BOI reporting deadlines.

2. Narrowed Scope: The Treasury Department will issue a proposed rulemaking that limits the reporting requirements to foreign reporting companies only, significantly reducing the number of businesses affected by the CTA.

3. Regulatory Uncertainty: While this announcement signals a shift in the CTA's implementation, small business owners should continue to monitor updates from the Treasury Department as the proposed rulemaking process unfolds.

4. Stay Informed: Businesses should still maintain accurate records of their ownership structures in case future regulations require compliance.

Moving Forward

The temporary halt in enforcement provides relief for many small businesses concerned about the administrative burden of CTA compliance. However, the evolving nature of these regulations makes it essential for small business owners to stay updated on any new developments.

At The Whipple Law Group, we remain committed to helping small businesses navigate changing regulations and protect their interests. If you have questions about your business's legal obligations under the Corporate Transparency Act or any other business law matters, contact us today for personalized guidance.