If you are a small business owner who has been following the Beneficial Ownership Information (BOI) reporting saga, you have likely experienced whiplash. Over the past 18 months, the Corporate Transparency Act (CTA) and its BOI reporting requirements have been challenged in court, frozen by injunctions, reinstated by the Supreme Court, and ultimately gutted by FinCEN itself. Here is where things stand now and what it means for your business.
The Court Battle: A Timeline
The CTA was enacted in 2021 to combat money laundering and illicit finance by requiring most U.S. business entities to report their beneficial owners to FinCEN. When the reporting requirements took effect on January 1, 2024, legal challenges followed almost immediately.
In March 2024, a federal court in Alabama ruled in National Small Business United v. Treasury that the CTA was unconstitutional, prohibiting enforcement against the plaintiffs. The Eleventh Circuit reversed that decision in December 2024, upholding the law’s constitutionality under the Commerce Clause.
A more significant challenge emerged in Texas. In Texas Top Cop Shop, Inc. v. Garland, a federal district court issued a nationwide preliminary injunction on December 3, 2024, halting all BOI enforcement. A Fifth Circuit motions panel briefly stayed that injunction on December 23, but just three days later a merits panel reinstated it, creating a nationwide freeze on BOI reporting.
On January 23, 2025, the U.S. Supreme Court stepped in, staying the district court injunction and allowing enforcement to resume while the Fifth Circuit considered the case on the merits. This was not a ruling on constitutionality but rather a procedural move allowing the government to enforce the law while litigation continued.
FinCEN’s Game-Changing Rule: March 26, 2025
While the courts debated constitutionality, FinCEN issued an interim final rule on March 26, 2025, that rendered much of the litigation moot for most American business owners. The rule completely exempted all entities formed in the United States from BOI reporting requirements.
This means every domestic corporation, LLC, partnership, business trust, and other entity formed under U.S. law is now exempt. The definition of “reporting company” was narrowed to include only foreign entities that have registered to do business in a U.S. state or tribal jurisdiction.
What This Means for Sole Proprietors and Single-Member LLCs
Sole proprietors were never required to file BOI reports because a sole proprietorship does not form by filing documents with a secretary of state and was never classified as a “reporting company” under the CTA. Registering a DBA (Doing Business As) name does not change this. If you operate as a sole proprietor, no action has ever been required on your part.
Single-member LLCs were previously required to file BOI reports unless they qualified for one of 23 specific exemptions. As of March 26, 2025, all single-member LLCs formed in the U.S. are completely exempt, regardless of their nature, revenue, or structure. If you already filed a BOI report before the exemption took effect, you do not need to update or amend it.
Multi-member LLCs, corporations, and partnerships are all similarly exempt as long as they were formed under U.S. law.
Who Still Needs to File?
Only foreign companies that have registered to do business in any U.S. state or tribal jurisdiction remain subject to BOI reporting. These entities must report by April 25, 2025, if registered before March 26, 2025, or within 30 days of registration thereafter. However, even these foreign entities are no longer required to report information about their U.S. beneficial owners.
The Bottom Line
After more than a year of uncertainty, confusion, and legal battles, the practical outcome for U.S. small business owners is straightforward: you do not need to file BOI reports. The litigation may continue through the Fifth Circuit and potentially to the Supreme Court, but FinCEN’s regulatory action has eliminated the reporting burden for the vast majority of American businesses. BCA will continue monitoring any developments and will update clients if the regulations change again.
Disclaimer: This article is for informational purposes only and is not legal, tax, or financial advice. BCA is not a licensed professional services firm. We help clients assess their situations and work with licensed attorneys, tax advisors, and other qualified professionals on your behalf. Read our full Disclaimer and Terms of Use. Have questions? Contact BCA and let us put the right team together for you.
Sources and Further Reading
- FinCEN Beneficial Ownership Information: fincen.gov/boi
- FinCEN News Release on Domestic Exemption: fincen.gov
- Federal Register Interim Final Rule: federalregister.gov
- U.S. Treasury Press Release: home.treasury.gov
- FinCEN Interim Final Rule Q&A: fincen.gov/boi/ifr-qa