FinCEN has removed the requirement that U.S. companies and U.S. persons file a Beneficial Ownership Information Report as of March 21, 2025; the report is now voluntary. Foreign companies still have to file.
Keep in mind this is a developing situation, and additional guidance is expected this year.
Meanwhile, LegalZoom’s Compliance Filings can help you stay current with these changes and submit your business’ required filings—whether BOIRs, annual reports, or amendments. Our attorneys track filing requirements at the state and federal levels, and you’ll get timely alerts when action is needed. If you need immediate support, we also have a dedicated team of compliance specialists ready to answer your questions.
More than 32 million businesses in the United States are small—playing an important role in our economy by creating nearly 65% of net new job creation over the past 20 years and making up almost 99% of all businesses in the country. Yet, starting a small business, running it, and staying compliant with ever-changing laws and regulations is challenging.
What is the Corporate Transparency Act?
One of those laws that small businesses must pay close attention to is the Corporate Transparency Act (CTA), designed to curb financial crimes and fraud. Certain companies are asked to submit a Beneficial Ownership Information Report (BOIR) to the Financial Crimes Enforcement Network (FinCEN), disclosing the identities of non-U.S. citizens who own or control the business to make it more difficult for individuals to use corporate entities for illicit purposes.
Tips for filing your BOIR
To help encourage small businesses to start the BOIR filing process, here are some tips. First, determine if your business qualifies as a reporting company under the CTA. Typically, this includes some foreign-owned corporations, limited liability companies (LLCs), and similar entities established through filings with state or Tribal authorities. Once you have confirmed your obligation to file, provide detailed information about your beneficial owners, the non-U.S. citizens who have significant control over the company or own 25% or more of its interests.
For many small business owners—many of whom have other jobs in addition to running their own businesses—seeking guidance from third-party companies specializing in regulatory compliance can be highly beneficial. LegalZoom’s research has found that most business owners actually prefer hands-on guidance to ensure they submit the most accurate reports to avoid non-compliance. Additionally, specialists offer invaluable guidance to ensure all required information is submitted on time, thereby minimizing the risk of errors or potential penalties.
FAQs about the Corporate Transparency Act
What is the purpose of the Corporate Transparency Act?
The Corporate Transparency Act is a U.S. law intended to help identify and prevent money laundering and other illicit activities within the country by enforcing transparency standards for U.S. businesses.
Who is considered a beneficial owner?
A beneficial owner is a non-U.S. citizen who has significant control over a reporting company or who owns at least one-quarter of the company's ownership interests.
How often do you need to update beneficial ownership information?
Reporting companies need to update their beneficial ownership information within 30 days of certain changes, such as any change in the company's ownership. Domestic companies do not need to file a BOI report. Check FinCEN's website to see if your entity is exempt.