H.R.736 - Protect Small Businesses from Excessive Paperwork Act of 2025 (119th Congress)
Summary
H.R.736, the "Protect Small Businesses from Excessive Paperwork Act of 2025," aims to amend title 31 of the United States Code, specifically targeting the deadline for filing beneficial ownership information reports. This applies to reporting companies formed or registered before January 1, 2024. The bill seeks to extend the filing deadline for these pre-existing companies.
The current deadline, set as two years after the effective date of regulations, would be replaced with a fixed date of January 1, 2026. This change intends to provide small businesses with more time to comply with the reporting requirements.
The bill was introduced in the House of Representatives on January 24, 2025, and referred to the Committee on Financial Services.
Expected Effects
The primary effect of H.R.736 would be to grant small businesses more time to file beneficial ownership information reports. This extension could reduce the immediate burden of compliance.
By changing the deadline to a fixed date, it offers clarity and potentially reduces confusion for businesses. This could lead to better compliance rates and fewer penalties for late filing.
However, it's important to note that this is a deadline extension, not an elimination of the reporting requirement itself.
Potential Benefits
- Provides small businesses with additional time to comply with beneficial ownership reporting requirements.
- Reduces the immediate burden of paperwork and compliance costs for small businesses.
- Offers clarity by establishing a fixed deadline instead of a deadline tied to regulatory effective dates.
- May lead to improved compliance rates due to the extended timeframe.
- Could prevent penalties and fines associated with late filing for small businesses.
Most Benefited Areas:
Potential Disadvantages
- Delays the receipt of beneficial ownership information, potentially hindering efforts to combat financial crimes in the short term.
- Does not address the underlying complexity or necessity of the reporting requirements themselves.
- May create a perception of leniency that could lead to some businesses delaying compliance until the last minute.
- The extension is only for pre-existing companies; new companies still face the original deadline.
- Could be viewed as a temporary fix rather than a comprehensive solution to the paperwork burden on small businesses.
Constitutional Alignment
The bill appears to align with the Constitution, particularly Article I, Section 8, which grants Congress the power to regulate commerce. The modification of reporting deadlines falls under Congress's authority to enact laws necessary and proper for carrying out its enumerated powers.
There are no apparent infringements on individual liberties or rights as the bill only modifies a reporting deadline. It does not appear to violate any specific constitutional amendments.
However, the constitutionality of the underlying reporting requirements (which this bill amends) is a separate question that is not addressed here.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).