Reminder: Beneficial Ownership Information Reporting Deadline is Approaching

Update on the Corporate Transparency Act and Beneficial Ownership Information Reports

In previous articles on our blog, we highlighted the provisions of the 2021 Corporate Transparency Act (CTA), the Beneficial Ownership Information (BOI) Reporting Rules, and the business impact of the March 2024 court ruling on the CTA.

BOI reporting deadlines

An important deadline for U.S. companies to report information on their beneficial owners to the Financial Crimes Enforcement Network (FinCEN) is fast approaching.

Companies that are required to comply (“reporting companies”) must file their initial reports by the following deadlines:

• Existing companies: Reporting companies created or registered to do business in the United States before January 1, 2024, must file by January 1, 2025.
• Newly created or registered companies: Reporting companies created or registered to do business in the United States in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective. The reporting deadline is currently scheduled to drop to 30 days after notice of creation for entities created after January 1, 2025.

Beneficial ownership information reporting is not an annual requirement. A report only needs to be submitted once, unless the filer needs to update or correct information.

Does your business need to report?

Under the terms of the CTA, any legal entity, including domestic corporations, limited liability companies, limited partnerships, single member LLCs, must file reports of beneficial ownership with FinCEN. A beneficial owner directly or indirectly exercises substantial control the reporting company or controls at least 25% for the ownership interests of the reporting company. The CTA rules contain a list of 23 entities that are exempt from the reporting requirements.

Note: In most situations, reporting businesses will be able to simply file a BOI report online through FinCEN without the need for an accountant, attorney, or others to file reports on companies’ behalf.

Why is BOI reporting still required if the CTA was ruled unconstitutional?

In March, a federal district court in Alabama ruled the Corporate Transparency Act (CTA) unconstitutional. As a result, FinCEN will not enforce the BOI reporting requirement of the plaintiffs, 65,000 members of the National Small Business Association. FinCEN is continuing to implement the CTA, and the federal district court decision has been appealed by the U.S. Department of Justice. Until a final court decision is made, reporting companies should comply with current BOI reporting requirements.

FinCEN resources

FinCEN has prepared a variety of resources to help your business meet BOI compliance requirements and is actively engaging in an outreach and education campaign to raise awareness of the compliance requirements. Review the links below for additional information, updates, and E-filing options.

• FinCEN Virtual Info Session on Beneficial Ownership Reporting | September 25, 2024
• FinCEN FAQs
• BOI E-Filing System
• Subscribe for FinCEN updates

What’s next?

We will continue to provide information on new or changing reporting requirements to keep your business up to date on compliance matters. If your business has additional concerns or questions regarding BOI compliance, we recommend contacting your legal counsel for assistance.