FinCEN's 2025 rollback of beneficial ownership reports, and what still applies to startups

On March 21, 2025, in Washington, the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury, announced an interim final rule removing the requirement for US companies and US persons to report beneficial ownership information under the Corporate Transparency Act. Every entity created in the United States, startups included, became exempt. Only companies formed under the law of a foreign country and registered to do business in a US state or tribal jurisdiction still have to report. FinCEN made the change permanent with a final rule that took effect on August 14, 2026.

What the law had required

Congress enacted the Corporate Transparency Act on January 1, 2021, as part of the Anti-Money Laundering Act of 2020. FinCEN's reporting rule, published on September 30, 2022, took effect on January 1, 2024. It required corporations, limited liability companies and similar entities to report identifying information about themselves and their beneficial owners and, for companies created from 2024, the company applicants who formed or registered them.

A beneficial owner is an individual who, directly or indirectly, exercises substantial control over a company or owns or controls at least 25% of its ownership interests. Companies that existed before 2024 had until January 1, 2025, to file their first report. Those created in 2024 had 90 days, and those created from January 1, 2025, had 30 days. FinCEN's original analysis expected 32,556,929 reporting companies in 2024.

Court orders, a suspension and the March 2025 rule

The January 2025 deadline did not hold. On December 3, 2024, a federal district court in Texas preliminarily blocked enforcement of the act nationwide; the Supreme Court stayed that order on January 23, 2025. A second Texas order, of January 7, 2025, was stayed by the same court on February 18, 2025, and FinCEN then extended most deadlines to March 21, 2025. On March 2, 2025, the Treasury said it would not enforce penalties or fines against US citizens or domestic reporting companies and their beneficial owners, and that it would narrow the rule to foreign companies.

The interim final rule announced on March 21 was published in the Federal Register on March 26, 2025. FinCEN applied its exemptions from March 21. It redefined a reporting company as an entity formed under foreign law that has registered to do business in a US state or tribal jurisdiction by filing a document with a secretary of state or a similar office. Such companies do not report any US persons as beneficial owners, and US persons do not have to provide their information to them. Foreign companies already registered before March 26, 2025, had to file by April 25, 2025, and those registering later have 30 calendar days after receiving notice that their registration is effective.

What the 2026 final rule added

FinCEN issued the final rule on August 11, 2026, and it took effect on its publication in the Federal Register on August 14. It makes the interim rule's exemptions permanent, and FinCEN describes two substantive changes that widen the relief for US persons. Under the final rule:

• Foreign reporting companies no longer report US persons who acted as company applicants, the individuals who filed or directed the registration (new).
• US persons who obtained a FinCEN identifier do not have to update or correct the information they gave to get it (new).
• Foreign pooled investment vehicles registered in the US do not report the information of a US person who controls them.
• FinCEN will delete information about company applicants, beneficial owners and FinCEN ID holders that it reasonably believes was provided by US persons, for example because it is linked to a US passport or driver's license.

FinCEN says the final rule imposes no new reporting requirements, so it needed no transition period. Foreign reporting companies must still report their non-US beneficial owners, and FinCEN expects to work with the National Archives and Records Administration so that the deletions comply with federal records laws.

What it means for founders

A startup formed in any US state has no beneficial ownership report to file with FinCEN, and neither do its US founders or investors. A company formed abroad that registers to do business in a US state must report within 30 calendar days of receiving notice that its registration is effective, unless it qualifies for one of the exemptions, and it reports only its non-US beneficial owners. For itself, it gives its legal name and any trade names, its address in the United States, its country of formation, the state or tribal jurisdiction where it first registered, and a US or foreign tax identification number.

Ownership questions do not disappear entirely. FinCEN points out that banks and other covered financial institutions must still collect beneficial ownership information from business customers under the Customer Due Diligence Rule, so a company's bank can still ask who owns and controls it. FinCEN also warns of scam letters about beneficial ownership filings: there is no fee to file with FinCEN, and it has no "Form 4022" or "Form 5102".

Raising money brings different paperwork: our explainer on startup funding covers the SEC's Form D.