An Update to the Corporate Transparency Act: Beneficial Ownership Information Reporting Requirements
Update (March 5, 2025): Since the original publication of this article, the U.S. Treasury and FinCEN have announced a suspension of penalties and enforcement for BOI reporting requirements for domestic entities. Additionally, the Treasury Department is considering revisions to the rule that may further limit its scope. As your trusted compliance partner, VertiSource HR is committed to keeping you informed about these ongoing changes and their potential impact on your business. See the updated details below.
Understanding the Corporate Transparency Act (CTA) and BOI Reporting
The Corporate Transparency Act (CTA), which took effect in 2024, requires businesses to report their Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). This rule aims to combat illicit financial activity by increasing transparency regarding business ownership.
Initially, the BOI reporting deadline was set for March 21, 2025, and non-compliance was expected to result in penalties. However, significant changes in FinCEN’s enforcement approach have now altered the compliance landscape.
New Developments: Suspension of Enforcement for Domestic Entities
- FinCEN’s February 27, 2025, Announcement: FinCEN stated that it will not impose fines or penalties on businesses required to submit BOI reports under the previous deadlines. This means that companies that have not yet filed will not face immediate legal consequences.
- Treasury Department’s March 2, 2025, Update: The Treasury announced that it will not enforce BOI reporting requirements against domestic entities and is considering revisions to the rule that would limit reporting obligations primarily to foreign reporting companies.
- Future Changes Expected: The Treasury Department has also signaled that formal rule revisions are forthcoming. These revisions may significantly reduce or eliminate BOI reporting requirements for most U.S.-based businesses.
What This Means for your Business
Previously, businesses were urged to file their BOI reports before the March 21, 2025, deadline to avoid penalties. However, given the latest developments:
- Domestic businesses are no longer subject to BOI enforcement actions as of March 2, 2025.
- Companies should stay informed about further rule changes, as the final scope of reporting requirements is still under review.
- Foreign reporting companies may still be required to comply, but further clarification is expected from FinCEN in the coming months.
Next Steps: Stay Updated
While the BOI reporting requirement remains part of the CTA, its enforcement has been temporarily suspended for domestic entities. Businesses should:
- Monitor official FinCEN and Treasury announcements for updates on rule revisions.
- Evaluate whether they fall under foreign reporting company classifications that may still be required to file.
- Consult with VertiSource HR, your compliance expert, to understand how these changes impact your specific circumstances and ensure you remain compliant.
For the latest official guidance, visit FinCEN’s website and the U.S. Treasury Department.
Conclusion
The landscape surrounding Beneficial Ownership Information reporting has changed significantly in recent weeks. While businesses were previously expected to comply by March 21, 2025, FinCEN has since suspended enforcement for U.S.-based companies, and further revisions to the rule are expected.
As these regulatory updates continue to unfold, VertiSource HR is closely monitoring the situation and will provide timely updates to ensure your business remains compliant.
Our team is dedicated to helping you navigate these evolving requirements with confidence.
