Treasury Suspends Enforcement of Corporate Transparency Act’s Beneficial Ownership Interest Rule – What This Means for Businesses

On March 2, 2025, the U.S. Department of the Treasury announced it is suspending enforcement of the Corporate Transparency Act’s (CTA) Beneficial Ownership Interest (BOI) rule for U.S. citizens and domestic reporting companies. This move, backed by the Trump Administration, is intended to prevent what officials describe as potential misuse of the rule against American businesses.

The announcement signals a significant shift in federal policy, but uncertainty remains. Treasury has stated it will issue a proposed rulemaking to clarify the changes, leaving many business owners wondering what the future of corporate transparency regulations will look like.

Understanding the Corporate Transparency Act & the BOI Rule

The Corporate Transparency Act (CTA) was enacted in 2021 as part of a broader effort to combat money laundering, fraud, and illicit financial activities. A key component of the CTA is the Beneficial Ownership Interest (BOI) rule, which requires certain businesses to disclose information about individuals who own or control them.

What is the BOI Rule?

The BOI rule mandates that reporting companies submit detailed ownership information to the Financial Crimes Enforcement Network (FinCEN), including:

• The identities of beneficial owners (those who own or control at least 25% of a company).

• Personal details, such as full legal names, birthdates, addresses, and social security numbers

• Information on company applicants, which includes those who formed or registered the business.

Who is Affected?

• The rule primarily impacts small businesses and LLCs that are not already subject to federal oversight.

• Certain large, publicly traded, and heavily regulated entities (such as banks) are exempt.

• Penalties for non-compliance can be severe—up to $500 per day in civil fines and criminal penalties reaching $10,000 and two years in prison.

---

Why is Treasury Suspending Enforcement?

The Treasury Department’s announcement reflects a broader policy shift under the Trump Administration, which has voiced concerns that the BOI rule could be weaponized against American businesses.

According to Treasury Secretary Scott Bessent:

This is a victory for common sense. 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.

The Trump Administration believes the BOI rule could be misused, potentially subjecting American entrepreneurs and small business owners to overreach, harassment, and unnecessary legal exposure. By pausing enforcement, the administration aims to prevent potential abuse of regulatory power while ensuring that compliance burdens do not stifle economic growth.

What Comes Next? The Rulemaking Process

While enforcement is paused, the Treasury Department is expected to issue a "proposed rulemaking" to clarify the future of the BOI rule.

What is Rulemaking?

Rulemaking is the formal process through which federal agencies create or modify regulations. It typically follows these steps:

1. Notice of Proposed Rulemaking (NPRM) – Treasury will publish a proposed rule in the Federal Register, outlining intended changes and inviting public comments.

2. Public Comment Period – Businesses, legal experts, and the general public can submit feedback on the proposed changes.

3. Final Rule Issuance – After reviewing comments, Treasury will finalize and implement the rule, adjusting it as necessary.

The exact timeline for this process remains uncertain, but stakeholders should expect several months of review and potential revisions before a final determination is made.

What Should Business Owners Do Now?

For now, businesses that would have been required to comply with the BOI rule can breathe a sigh of relief. However, this is not a permanent repeal—just a pause while the administration reworks the rule’s application.

---

 Steps to Take While Waiting for Rulemaking

• Monitor Treasury Updates – The proposed rulemaking will provide critical guidance on compliance obligations.

• Prepare for Possible Compliance – While enforcement is paused, record-keeping best practices remain essential in case reporting requirements resume in some form.

• Engage in Public Comment – Businesses concerned about the BOI rule should take advantage of the public comment period once Treasury publishes its proposed rule.

Conclusion

The suspension of the BOI rule’s enforcement is a major regulatory shift that reduces immediate compliance burdens for American businesses. However, uncertainty remains as we await Treasury’s proposed rulemaking, which will determine how (or if) the rule applies moving forward.

The Trump Administration’s stance is clear: corporate transparency should not come at the expense of law-abiding American businesses. But for now, business owners must stay informed and engaged in the rulemaking process to ensure their voices are heard.

If you have business or regulatory law questions reach out to Jmoore@Princelaw.com or give us a call at 888-202-9297 today!
For information about reuse of this article or questions about becoming a contributor, email info@MooreLegalCounsel.com we look forward to hearing from you!

---

*This article contains information from the Treasury Department press release available at: https://home.treasury.gov/news/press-releases/sb0038

---

---