On August 11th, 2026, the Trump administration, through the US Department of the Treasury’s Financial Crimes Enforcement Network, announced the permanent shutdown of BOI (Beneficial Ownership Information), marking the end of the Beneficial Ownership reporting requirements for US companies.
Most entities required to report before August 11th, 2026 were Limited Liability Companies (LLCs), the most common entity type for doing business in the USA.
The Beneficial Ownership Information Report was a database that linked LLCs and other business entities to their real owners and any person who was a direct beneficiary of the company. FinCEN, the Financial Crimes Enforcement Network, an agency of the Department of the Treasury, administered the database.
How Did BOI Reporting Start?
Congress, in a bipartisan manner, created this database through the Corporate Transparency Act of 2019 to clarify how LLCs are formed and operated, disclose their true owners, and make it harder for shell companies and bad actors to use a legal entity to conduct illicit business. Congress recognized that bad actors could create business entities and wanted to prevent terrorist organizations, money launderers, and tax evaders from benefiting from the American business environment.
The Corporate Transparency Act imposed severe penalties for non-reporting. This Act was meant to be implemented in 2021, and some businesses complied by sending their BOI Reports to FinCEN.
The Beneficial Ownership Report was Protested
Some libertarians and business owners protested FinCEN’s implementation of the CTA and BOI as an undue burden on free enterprise. But many lawmakers in Congress had previously agreed that collecting beneficial owners through the database was required for a better and safer business environment.
The creation of BOI was litigated in the courts, which prevented full implementation of the Corporate Transparency Act and, therefore, the full effect of the penalties.
Finally, under the Trump administration’s push to eliminate oversight in diverse government agencies, the administration decided to dismantle BOI reporting for US owners.
This move by the Trump administration was announced as “… a victory for common sense and American small businesses,” by Secretary of the Treasury Scott Bessent. “President Trump promised to cut red tape, and this final rule delivers. Treasury is eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising our national security.”
Other countries and international communities are implementing BOI-like initiatives to curtail illicit businesses, and even some states like New York have their own databases for businesses formed in the state.
The End of the Beneficial Ownership Reporting. What does it mean for Business Owners?
In practical terms, it means US persons no longer must report the real owners of businesses. However, under FinCEN’s final rule issued in August 2026, non-U.S. companies registered to do business in the United States must still file a Beneficial Ownership Information (BOI) report, but only for their non-U.S. person beneficial owners and company applicants.
In other words, foreign companies must disclose foreign beneficial owners and file BOI Reports.
In detail:
- Foreign Reporting Companies: Entities formed abroad that register to do business in a US state or tribal jurisdiction remain subject to BOI reporting.
- Non-U.S. Owners Only: Covered foreign companies must report details for individuals who are non-U.S. persons and hold substantial control or ownership.
- Persons Excluded: Foreign reporting companies do not need to report or provide information on any beneficial owners or company applicants who are US persons.
- Subsidiaries: Many international groups use a U.S.-formed subsidiary to conduct operations; because domestic US companies are completely exempt from BOI reporting, these local subsidiaries do not file.
The problematic implementation of BOI for small businesses.
Although we applauded BOI’s aim to increase transparency in the business environment, there were some challenges for the small business community, especially immigrant business owners. The process was burdensome for many with limited English, and many would have needed legal guidance to complete the reporting. Additionally, the penalties for non-reporting were too steep for small business owners.
Criticisms of the End of the Beneficial Ownership Reporting
Many legal observers criticize the end of the program and characterize it as another attempt at deregulation, a major priority of the Trump administration. Critics emphasize the need for transparency in the business environment to prevent bad actors who can use legal entities for nefarious purposes such as drug, human, and arms trafficking, among others.
How Can We Help You?
Marcos Law is ready to help with your company needs, from legal compliance and proper registration to partner agreements and contract matters. Now that BOI is overturned, you have one less thing to worry about and can focus on creating value for your customers.
Attorney Marcos offers a free 15-minute phone consultation so you can reach out with your business legal questions.
Call us at (480) 324-6378 to start having a conversation.
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