New Laws & Regulations for Small Business Owners in 2025

In 2025, small businesses face a host of new laws and regulations that require careful attention. From new federal reporting requirements to state-specific rules, knowing what’s on the horizon is key for small business owners and decision-makers.

In this post, we’ll break down some of the most significant changes and updates coming next year.

Here’s a look at what’s new and what it means for you:

• Federal laws that affect business operations across the board
• State-specific updates
• Taxation adjustments that will impact your bottom line
• Compliance strategies to help you manage the new landscape

These insights can help you position your business for success, avoid penalties and fines, and give you the peace of mind needed to keep your business growing in 2025.

Federal Changes to Small Business Laws for 2025

These rules will affect all small businesses in every industry in the United States.

Beneficial Ownership Information Reporting

The Corporate Transparency Act (CTA) introduces a new reporting requirement for small businesses: Beneficial Ownership Information (BOI) reporting. This requirement will take effect in 2025.

Administered by the Financial Crimes Enforcement Network (FinCEN), this law requires businesses to report identifying information about individuals with significant ownership or control over the company.

Here’s what you need to know:

What’s Required?

Companies will need to report names, addresses, birthdates, and ID numbers for each beneficial owner.

Who Is Affected?

This requirement applies to most small businesses, including LLCs and corporations, with exceptions for larger publicly traded companies.

What’s the Deadline?

Existing businesses must report by the end of 2025, while newly formed businesses will have 30 days to report their BOI.

The goal is to increase transparency and reduce criminal activities such as money laundering, but this may add a layer of administrative responsibility for business owners. Read more about the law and its changes on FinCEN’s website.

Data Collection Requirements for Lenders

The Consumer Financial Protection Bureau (CFPB) also introduced a rule that indirectly impacts small businesses. Lenders are now required to collect demographic data on small business borrowers, including race, gender, and business size.

Here’s a breakdown of the rule:

Who’s Impacted?

While the rule is directed at lenders, it impacts small businesses because lenders will require this information during the loan application process.

Why Does It Matter?

The rule aims to promote fair lending practices and transparency.

What’s Next?

Understanding this requirement can help you, as a small business owner, better navigate the lending process and prepare your business for questions related to demographic data.

Being aware of this shift allows business owners to anticipate the information lenders will request, which can streamline the financing process. The CFPB has a more detailed breakdown on this website.

State-Specific Changes to Small Business Laws

California and Illinois have made notable changes to small business laws, among many other states.

California’s New Small Business Laws

California continues to lead in introducing new labor and employment laws directly affecting small businesses. For 2025, some notable changes include:

• Minimum Wage Increase: California’s minimum wage is set to increase, continuing a phased approach toward $16.50 per hour. This impacts wage calculations and payroll budgets.
• Privacy Requirements: New privacy legislation will require stricter data handling and storage practices for businesses collecting customer and employee information.

These updates mean California employers must review payroll and business practices to ensure compliance.

Potential Change to California’s Beneficial Ownership Disclosure Requirements

Though this change is not yet official, the state Senate has approved it, so it is worth monitoring.

California has proposed legislation that would go beyond federal rules by potentially making beneficial ownership information publicly accessible. This would impact LLCs and other similar business structures.

Here’s what small businesses in California should know:

• Public Disclosure: If enacted, small businesses must make ownership data available to the public.
• Compliance Implications: Small businesses may need to invest in tools or services to manage and disclose this information securely.

This legislation aims to increase corporate transparency but may raise privacy and compliance concerns. BBSI will keep you updated as the situation evolves.

Illinois’ New Data Privacy Regulations

Illinois has implemented new data privacy regulations that impact how businesses handle customer data.

Key highlights include:

• Stricter Data Collection Standards: Illinois now requires businesses to obtain explicit customer consent before collecting specific data.
• Data Security Obligations: Businesses must implement enhanced cybersecurity measures to protect sensitive data.
• Penalties for Non-Compliance: Fines and other penalties apply for breaches of these new standards, making compliance crucial.

Illinois’ law aligns with broader national and international trends on data privacy. To stay compliant, small business owners should prioritize technology investments and data-handling practices.

Taxation and Financial Reporting Updates for 2025

Taxation and financial reporting changes occur at both the federal and state levels.

Here’s what you need to know for 2025:

IRS Tax Inflation Adjustments for 2025

The IRS annually adjusts tax brackets, deductions, and credits based on inflation, which will impact small business owners in 2025.

Key changes include:

• Adjusted Tax Brackets: Income brackets are adjusted to reflect inflation, affecting tax liabilities for business owners.
• Standard Deduction Changes: The IRS has raised the standard deduction, which could impact how you file and claim expenses.

Small businesses should review these adjustments with their financial advisors to optimize tax savings and adjust their budgets accordingly.

State-Level Tax Changes for 2025

California is implementing significant tax law changes.

The state has introduced a workaround for federal SALT (State and Local Tax) deduction limits.

This affects high-tax states, allowing business owners to deduct more in state taxes on their federal returns.

• What’s Involved: The SALT workaround allows pass-through entities to reduce federal tax liability.
• Who Benefits: High-income earners and business owners in high-tax states benefit most.
• How to Implement: Consulting a tax advisor is recommended for businesses looking to capitalize on this provision.

Keeping up with federal and state tax changes can be challenging, but small businesses can find ways to minimize tax liabilities with professional assistance.

How to Learn More about Changes to Small Business Laws Going Forward: BBSI Has Your Back

Remaining proactive about compliance is essential for small businesses in today’s evolving landscape.

If you’re going it alone, here are a few strategies to help:

• Websites like the Small Business Administration (SBA) and state business resources offer regular updates on compliance requirements.
• Joining industry associations and business networks can keep you updated on changes relevant to your sector.
• From cybersecurity solutions to accounting software, investments in the right tools can streamline compliance efforts.

However, if you find keeping up with all these changes overwhelming, BBSI has your back. As a BBSI partner, you’d gain access to a wide range of tailored solutions designed specifically to help small businesses stay focused on the bigger picture.

We regularly monitor regulatory changes and can help you implement necessary policies. In addition, our dedicated HR and payroll systems can make the stress of compliance disappear, freeing up more time for you to grow your business.

Stop worrying about keeping track of regulatory changes on your own. Contact your local BBSI representative today, and let us do it for you.