Treasury Repeals Beneficial Ownership Reporting Rule for U.S. Companies

In August 2026 the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a final rule that permanently eliminates the requirement for U.S. companies and U.S. persons to file beneficial-ownership information under the Corporate Transparency Act. The rule takes effect upon publication in the Federal Register and directs FinCEN to delete all previously submitted data that pertain to U.S. persons from its database.

FinCEN Ends Beneficial Ownership Reporting Requirement For Millions Of Small Business Owners United Press International (UPI)

The Corporate Transparency Act, enacted by Congress in 2021, mandated that domestic entities disclose the individuals who own or control them. The reporting obligation began in 2024, and an interim final rule had been in place since March 2025. The law was intended to combat money-laundering, terrorism financing, and other illicit financial activity by creating a federal registry of “beneficial owners” – defined as anyone who directly or indirectly owns at least 25 percent of a company or exercises substantial control.

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• Beneficial-owner threshold: 25 percent ownership or substantial control.

FinCEN Ends Beneficial Ownership Reporting Requirement For Millions Of Small Business Owners

• Scope of impact: The rule affected “millions of small business owners” who had been required to gather personal identification documents, navigate complex definitions, and meet filing deadlines under threat of civil and criminal penalties.

FinCEN Ends Beneficial Ownership Reporting Requirement For Millions Of Small Business Owners

• Remaining obligations: Foreign entities that register to do business in the United States must still report beneficial-ownership information for foreign individuals, but they are no longer required to disclose U.S. persons who helped them register.

FinCEN Ends Beneficial Ownership Reporting Requirement For Millions Of Small Business Owners

Treasury Secretary Scott Bessent described the repeal as “a victory for common sense,” emphasizing that it removes a “burdensome reporting requirement” for domestic firms. FinCEN announced that it will delete all previously filed U.S.-person data, including information linked to U.S. passports or driver’s licenses, thereby reducing privacy exposure. The agency also clarified that the exemption applies to U.S. citizens who hold FinCEN identification numbers, who will no longer need to update or correct their information.

FinCEN Ends Beneficial Ownership Reporting Requirement For Millions Of Small Business Owners

• “The Trump administration has dismissed law enforcement warnings, ignored the role that shell companies play in crimes ranging from drug trafficking to fraud to sanctions evasion and gutted a statue that Secretary Rubio once championed as 'the most significant anti-corruption and money-laundering law in decades,” — Sen. Elizabeth Warren

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The repeal eliminates a federal data-collection mandate that disproportionately affected single-member LLCs, family-owned firms, and modest professional practices—businesses that lack dedicated compliance resources. By removing the filing obligation and deleting existing records, the rule reduces administrative costs, lowers the risk of personal data breaches, and restores a clearer distinction between low-risk domestic entities and higher-risk foreign structures. Law-enforcement agencies retain other tools—bank reporting requirements, tax filings, and investigative authorities—to address illicit finance without the broad domestic registry. The permanent nature of the rule provides certainty for entrepreneurs, allowing them to focus on operations rather than ongoing regulatory compliance.

FinCEN Ends Beneficial Ownership Reporting Requirement For Millions Of Small Business Owners