In 2021, the United States Congress enacted the Corporate Transparency Act (CTA) to combat money laundering, terrorism financing, securities fraud, and other illicit financial activities by requiring businesses to be transparent about their ownership. With significant exceptions, the CTA generally required businesses to report certain information - known as Beneficial Ownership Information (BOI) - to the federal government. BOI must be reported to the Financial Crimes Enforcement Network (FinCEN) - a Bureau of the U.S. Department of Treasury - where the information was to be stored in a secured database.

The enactment of the CTA gave rise to questions and uncertainty regarding who was to file and when, and court decisions regarding the constitutionality of the CTA. Ultimately, this led to an announcement by the Treasury Department on March 2, 2025, stating that with respect to the CTA, the Department would not enforce:

• any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, and
• any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect.

The Treasury Department further stated that it would be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only.

On Aug. 11, 2026, FinCEN announced that it is issuing a final rule that permanently removes the requirement for U.S. companies and U.S. persons to report BOI to FinCEN under the CTA. The final rule became effective on Aug. 14, 2026. FinCEN also announced that it will delete previously reported information by U.S. persons—now exempt from the reporting requirements—from the BOI database.

The final rule:

• adopts the exemptions set out in the interim final rule issued in March 2025, making permanent the rollback of beneficial ownership reporting by U.S. companies;
• exempts U.S. persons who have obtained FinCEN IDs from any obligation to update or correct the information they originally provided to FinCEN to obtain their FinCEN IDs;
• eliminates the requirement for foreign companies to report U.S. person “company applicants” (i.e.,the individuals who helped those foreign companies register to do business in the United States);
• exempts foreign pooled investment vehicles registered in the United States from reporting the beneficial ownership information of a U.S person in control of the investment vehicle; and
• confirms that FinCEN will delete information about any individuals—company applicants, beneficial owners, or recipients of a FinCEN ID—that FinCEN reasonably believes is a U.S. person (e.g., the information is linked to a U.S. passport or U.S. driver’s license).

This final rule will serve to eliminate the uncertainty and administrative burdens associated with the CTA. As stated by Secretary of the Treasury Scott Bessent, the action by FinCEN is “a victory for common sense and American small businesses. Treasury is eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising our national security.”