Business trends to watch in 2025
Legislative trends to watch in 2025
Business trends to watch in 2025
Agentic AI
Agentic AI is poised to take the technology and business world by storm. Rather than respond to prompts and human direction, agentic AI models act independently and autonomously. These systems can plan, make decisions, solve complex problems, perform tasks, and interact and consult with the environment around them.
According to Gartner, by 2028, 33% of enterprise software applications will include agentic AI – up from less than 1% in 2024 – and agentic AI will perform 15% of day-to-day work autonomously.
Agentic AI differs from traditional AI assistants, such as chatbots and large language models like ChatGPT, in that it can accomplish complex goals. For instance, it can predict service issues in machines or IT networks and autonomously optimize or repair them before operations are affected. Additionally, agentic AI can analyze financial market trends, make quick decisions about trades, and adjust investment strategies without supervision.
AI governance
As generative AI applications become more prevalent, enterprises need robust AI governance policies to safeguard corporate data and intellectual property. Governance frameworks established by the U.S. and European Union (EU) provide valuable guidance in shaping these policies. The EU, in particular, is at the forefront with its risk-based regulatory framework, the EU AI Act. Signed into law in August 2024, this landmark legislation prioritizes privacy, security, and the responsible use of AI, setting a precedent likely to influence global regulatory efforts. The Act also applies to many U.S. companies, even those who don’t have a nexus in the EU, specifically:
- U.S. companies that directly operate, sell, or offer services within the EU, including via e-commerce or digital platforms.
- U.S. companies whose AI technology is part of products or services integrated or sold by EU-based businesses.
- U.S. companies that process data on EU residents.
Chief Information Security Officers must evaluate how the EU AI Act impacts their business and take steps to comply.
In 2025, state legislatures are expected to increase their efforts to regulate AI following a year of initial steps taken to manage this emerging technology.
Innovation is essential for maintaining competitiveness, and AI plays a key role in the modern business landscape. However, organizations must consider both the opportunities and risks associated with AI adoption, including cyber threats and regulatory challenges. Additionally, with the rapid advancements in generative AI and agentic AI – developments that are currently outpacing the establishment of standards – the coming year will place increased pressure on executives to create effective internal governance policies.
Tax policy changes
The Trump administration's pledge to reduce corporate taxes is likely to boost corporate earnings, which may be used to fund expansions and increase shareholder payouts through dividends or stock buybacks.
According to Goldman Sachs, the plan to slash the corporate tax rate from 21% to 15% could raise S&P 500 earnings by approximately 4%.
In addition, the GOP’s control of both the Senate and House of Representatives positions the party to shape future tax policy. Key provisions of the Tax Cuts and Jobs Act (TCJA), originally passed through the reconciliation process, are set to expire in 2025. With the filibuster still in place, the Senate will likely need to rely on reconciliation again to pass any new tax reforms. This procedural limitation could restrict the scope of changes achievable under the new Senate leadership.
Cybersecurity threats
As digital transformation progresses, so does the risk of cyber threats. By 2025, in the face of AI-driven attacks, ransomware, and other sophisticated threats, cybersecurity will remain a top priority for companies.
To protect sensitive data and maintain consumer confidence, businesses must implement robust, layered security measures. These include reviewing security policies and protocols, training employees, protecting endpoints, gaining visibility across hybrid IT, and continuous and proactive monitoring.
Trade policy changes
The incoming Trump administration has also pledged to introduce tariffs on imported foreign-made goods.
Imports from China are most at risk, though the impact of tariffs may be offset by the depreciation of the Chinese renminbi. Mexican and EU trading partners may also be targeted by sector-specific tariffs.
A big area of concern is manufacturing. Industries such as automakers, pharmaceuticals, and computer and software companies rely on global supply chains for raw goods, making them vulnerable to potential tariffs and consumer price hikes.
Retailers importing goods like clothing, homeware, appliances, and furniture will also be impacted.
How can companies prepare? Options include raising prices to protect margins, shifting production and sourcing to countries with lower or no tariffs, or leaving prices unchanged to avoid customer attrition.
Some businesses are purposely adding delays to their production pipeline since important parts in the supply chain are being sent to other countries before they reach the U.S. Meanwhile many retailers and manufacturers are bringing in their imports earlier than planned to dodge tariffs.
Navigating climate impacts
Climate change continues to affect businesses as extreme weather events, such as hurricanes, heatwaves, droughts, wildfires, and floods, impact the U.S. and its territories.
These events interrupt operations, damage property, and negatively impact employee well-being.
Climate change also disrupts supply chains and corporate counsel must find ways to ensure resiliency for years ahead, particularly in areas such as compliance and global trade. Mapping supply chains and assessing risks are key mitigation strategies. Corporate counsel must emphasize flexibility and look to expand supply chains and review existing vendor contracts.
In 2025, investors will undoubtedly scrutinize the climate goals established by companies more rigorously than ever before. They will actively ensure the disclosures related to these climate goals are accurate, consistent across various reporting locations, and aligned with the targets set forth.
Legislative trends to watch in 2025
AI regulations
President-elect Trump has stated an intention to roll back AI regulations imposed by various federal agencies. This could result in states filling the regulatory gap because of the potential dangers posed by AI. This may also spur more AI startups, making it crucial for their owners and advisors to understand the reporting requirements under the federal Corporate Transparency Act (CTA).
Consumer data privacy laws
Businesses that gather personal data from their customers must stay vigilant and ready to adhere to evolving consumer data privacy laws. With an increasing number of states implementing these regulations, companies are now required to uphold specific consumer rights and meet new business obligations. This shift underscores the importance of staying informed and proactive in managing customer data responsibly. In 2024, the American Privacy Rights Act was introduced as a federal data privacy law to override state laws. Whether the new Congress will pass it in 2025 is something companies handling personal information should closely monitor. Companies filing beneficial ownership information reports (BOIR) under the CTA and collecting personal information must also be aware of the data privacy laws enacted by U.S. states and foreign countries where their beneficial owners are located.
ESG
President-elect Trump has strongly criticized ESG initiatives and has promised to reduce or eliminate federal ESG regulations. In response, pro-ESG states may introduce legislation to fill the gap, providing protections in areas like climate change and ESG investing where federal oversight is reduced.
Board diversity
Board diversity continues to be a controversial topic, and corporations must stay on top of developments in this area. As with ESG, President-elect Trump has been critical of DEI initiatives, including the mandatory DEI training many companies have instituted. Companies should be aware of federal efforts to roll back or eliminate DEI policies initiated by the Biden administration. They should also look for state laws responding to federal efforts, both supporting and opposing DEI ideals.
Cryptocurrency/blockchain/digital assets
Half of all U.S. states have now amended their Uniform Commercial Code (UCC) laws to adopt amendments related to emerging digital technologies with more states set to follow in 2025.
President-elect Trump indicated he is a proponent of cryptocurrency, thus raising the possibility of reducing or eliminating current regulations to which cryptocurrency businesses are now subject. This could lead to and increase in transactions involving digital assets. This makes it more critical for state commercial laws to be updated to deal with transactions involving these assets, including the perfection of security interests where these assets are collateral. It could also lead to increased interest by the states in authorizing the formation of Decentralized Autonomous Organizations (DAOs) or other innovative blockchain-based business entities.
Federal securities laws
President-elect Trump has indicated his opposition to federal securities regulations adopted during the Biden administration and deregulation is a strong possibility.
Beneficial ownership information reporting (BOIR)
The second year of the federal Corporate Transparency Act begins in 2025. This means all domestic reporting companies created in 2025 and all foreign reporting companies registering to do business for the first time in 2025 will have 30 calendar days to file their initial BOI reports, after receiving notice of creation or registration.
It also means that as of January 2, 2025, all reporting companies created or registered with a deadline of January 1, 2025, that have not filed, will be filing late.
What the Financial Crimes Enforcement Network (FinCEN - the federal agency enforcing the CTA) will do about non-compliant companies remains an open question, particularly since it is expected that there will be changes in the directors of federal agencies, such as FinCEN, when the new administration takes office.
Delaware General Corporation Law amendments
It is always essential for the management and legal advisers of companies incorporated in Delaware to monitor the annual amendments to the Delaware General Corporation Law (GCL). Each year these amendments allow corporate management to take actions they consider beneficial or make other changes they must be aware of.
In 2024, these amendments were controversial – a relatively uncommon occurrence – as they codified standard market practices that seemed to violate sections of the GCL. It’s unknown whether that trend will continue in 2025 and more amendments to the GCL will be enacted as a response to threats of some corporations reincorporating in states thought of as being more favorable to management. Alternatively, there may be a rollback of the controversial amendments since many criticize for favoring management over shareholders. These questions make 2025 an especially important year to track Delaware legislation.
The New York LLC Transparency Act (NYLLCTA)
Beginning in 2026, all New York LLCs and all LLCs formed outside of New York and registered to do business in New York must report beneficial ownership information with the New York Department of State. LLCs will need to begin preparing during 2025. There are many details about BOI reporting under the NYLLCTA that will need clarification in 2025 either through further legislation or Department of State regulations. This is something all New York and registered foreign LLCs need to monitor throughout 2025.
Business identity theft/fraudulent filings
Business identity theft is a growing problem throughout the country. This takes various forms including criminals posing as officers, owners, or other authorized persons to change information on state records, file documents they are not authorized to file, steal a business entity’s name or tax identification number, reinstate suspended entities, or use the entity’s stolen identity to open lines of credit, and transact business for financial gain.
States are increasing efforts to combat business identity theft through fraudulent filings both through legislation – e.g., increasing penalties and instituting procedures for the reporting of fraudulent filings – and through increased security protections for online filings, e.g., requiring passwords to make a filing and notifying entities when a filing has been made on their behalf. Expect these efforts to continue, if not intensify in 2025.
Key takeaways
As we look ahead to 2025, it's clear that businesses must stay agile and proactive to navigate the evolving landscape. Key trends such as the rise of agentic AI, changes in tax policies, and the increasing importance of cybersecurity will shape business strategies. Additionally, legislative developments in AI regulations, consumer data privacy laws, and ESG initiatives will require companies to stay informed and compliant. By planning ahead, adapting to new challenges, and innovating, companies can position themselves for success in the coming year.
Learn more
As you navigate next year, CT Corporation is dedicated to helping your business stay compliant so you can focus on the year ahead. If you want to learn more, contact a CT Corporation representative.
