Original Blog – November 6, 2024
This is the foundational blog post introducing key concepts and initial insights about BOI. For the most recent updates and expanded discussions, please scroll to the bottom of the page to access the latest entries.
Update – December 11, 2024
This blog post provides additional context and clarifications on BOI, expanding on the foundational insights from earlier updates. While not the latest, it offers valuable perspectives and bridges key developments leading up to the most recent analysis. Click here to read the blog.
Update – December 27, 2024
A new blog post about BOI is now available, providing updated insights and a detailed overview of recent developments. You can read the blog post here. This post builds on our original article published on November 6, offering an expanded perspective for a clearer understanding of the topic. We encourage you to read it to stay informed.
Update – January 24, 2025
BOI reporting deadlines remain paused due to ongoing legal challenges. FinCEN confirms filing is not currently required, though voluntary submissions are accepted. You can read the blog post here.
Update – February 24, 2025
As previously reported on January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.). However, a separate nationwide order, issued by a different federal judge in the case of Smith, et al. v. U.S. Department of The Treasury, et al., No. 6:2024cv00336 – Document 30 (E.D. Tex. 2025), remained in place, and reporting companies were not required to file beneficial ownership information with FinCEN despite the Supreme Court’s January 23 action in the Texas Top Cop Shop case.
On Tuesday, February 18, 2025, the U.S. District Court for the Eastern District of Texas lifted the nationwide injunction in the Smith, et al. v. U.S. Department of The Treasury, et al. case and the beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are once again in effect for most reporting companies.
FinCEN updated its alert (“Alert”) on February 19, 2025, acknowledging that in light of the District Court’s decision, reporting companies, except those specifically named in the Alert, are once again required to file beneficial ownership information with FinCEN. The Department of the Treasury acknowledged that reporting companies may need additional time to comply with their BOI reporting obligations, and accordingly extended the reporting deadline 30 calendar days from February 19, 2025, for most companies as follows:
- For the vast majority of reporting companies, the new deadline to file an initial, updated, and/or corrected BOI report is now March 21, 2025. FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided.
- Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond March 21, 2025. These companies should abide by whichever deadline is later.
- Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.) — namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024) — are not currently required to report their beneficial ownership information to FinCEN at this time.
Further, in keeping with Treasury’s commitment to reducing regulatory burden on businesses, FinCEN, over the next 30-day period, will assess its options to further modify deadlines or reporting requirements for lower-risk entities, including many U.S. small businesses, while prioritizing reporting for those entities that pose the most significant national security risks.
In addition, there has been recent legislative development as efforts continue to seek a delay of the reporting deadline and on February 10, 2025, the House unanimously passed the Protect Small Businesses From Excessive Paperwork Act of 2025 (H.R. 736), which would delay the beneficial ownership information (BOI) mandatory reporting requirement due date to January 1, 2026, for entities formed prior to January 1, 2024. The bill has now been sent to the Senate.
Update – March 3, 2025
FinCEN has announced a pause on enforcement of CTA/BOI reporting deadlines until further notice, offering temporary relief to businesses. An interim final rule with updated guidance is expected by March 21, 2025. Read the latest update here.
Update – March 5, 2025
The Treasury Department has announced it will no longer enforce penalties or fines related to CTA/BOI reporting for U.S. citizens and domestic companies. Future rule changes will narrow the reporting requirement to foreign entities. This decision follows FinCEN’s recent pause on enforcement actions, providing much-needed clarity for businesses. Read our latest update here.
Original Blog – November 6th, 2024
The Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Department of the Treasury, has released Beneficial Ownership Information Reporting Requirements Small Entity Compliance Guidance (“The Guidance”) to assist small entities in complying with the Beneficial Ownership Information (“BOI”) requirements, as required by the Corporate Transparency Act (“CTA”).
https://home.treasury.gov/news/press-releases/jy0979.
As the CTA is not a part of the tax code, the assessment and application of many of the requirements set forth in the regulations, including but not limited to the determination of beneficial ownership interest, necessitate the need for legal guidance and direction. As such, since we are not attorneys, our firm is not able to provide you with any legal determination as to whether an exemption applies to the nature of your entity or whether legal relationships constitute beneficial ownership.
You have a few options for filing your BOIR:
- You can file this yourself by visiting the following website: https://boiefiling.fincen.gov/
- You can work with a legal advisor to file the BOIR on your behalf.
WHAT YOU NEED TO KNOW ABOUT THE REPORTING REQUIREMENT FOR THE BENEFICIAL OWNERSHIP INFORMATION REPORT (BOI).
Beneficial Ownership Reporting (BOR) is a regulatory requirement designed to enhance transparency in business ownership and combat financial crimes such as money laundering and tax evasion.
Entities typically required to report include:
- Corporations
- Limited liability companies (LLCs)
- Partnerships
- Trusts
- Any other legal entity that may conceal ownership
WHEN MUST COMPANIES FILE?
- 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.
- Companies whose beneficial ownership information has changed after an original filing must update their BOI reports within 30 days of the change. BOI reports are NOT filed annually; rather, after an initial report is filed, an additional filing is only required in the event of a change in BOI information.
WHAT ENTITIES ARE REQUIRED TO COMPLY WITH THE CTA’S BOI REPORTING REQUIREMENT?
Entities organized both in the U.S. and outside the U.S. may be subject to the CTA’s reporting requirements.
Your company may need to report information about its beneficial owners if it is:
- a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
- a foreign company and was registered to do business in any U.S. state or Indian tribe by such a filing.
ARE ANY COMPANIES EXEMPT FROM THESE NEW CTA REPORTING REQUIREMENTS?
Although it is estimated that 90% of American businesses will be required to report their BOI under these new rules, FinCEN lists 23 types of businesses that are exempt from these reporting requirements. Most of the exemptions relate to businesses that are already heavily regulated such as banks, securities dealers, and public companies. Other most common exemptions are:
- Inactive companies formed on or before January 1, 2020
- Large companies with more than 20 full time employees in the U.S., more than $5 million in sales, and a physical office in the U.S.
- Tax-exempt entities
WHO ARE BENEFICIAL OWNERS OF A COMPANY THAT MUST BE IDENTIFIED TO FINCEN?
A beneficial owner is any individual who, directly or indirectly:
- Exercises substantial control over a reporting company or
- Owns or controls at least 25 percent of the ownership interests of a reporting company
WHAT INFORMATION MUST BE DISCLOSED ABOUT A REPORTING COMPANY?
Generally, reporting companies must provide four pieces of information about each beneficial owner:
- name
- date of birth
- address
- the identifying number and issuer from either a non-expired U.S. driver’s license, a non-expired U.S. passport, or a non-expired identification document issued by a State (including a U.S. territory or possession), local government, or Indian tribe.
If none of those documents exist, a non-expired foreign passport can be used. An image of the document must also be submitted.
ADDITIONAL INFORMATION ON FILING DEADLINE EXTENSIONS FOR HURRICANE VICTIMS
FinCEN is providing this relief to reporting companies that meet two requirements.
First, the deadline for the reporting company to file an initial or updated BOI report must fall on or between October 4, 2024, and January 2, 2025.
Second, the reporting company must have its principal place of business in an area designated both by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance, and by the Internal Revenue Service (IRS) as eligible for tax filing relief as a result of Hurricane Milton.
If, after the date of this announcement, the IRS designates other areas affected by this natural disaster as eligible for tax filing relief, the reporting companies with their principal place of business in those areas will also receive the same BOI reporting relief from FinCEN automatically.
For example, the initial BOI report of a reporting company created or registered before January 1, 2024, normally would be due by January 1, 2025.
If such a company has its principal place of business in an area designated both by FEMA as qualifying for individual or public assistance and by the IRS as eligible for tax filing relief as a result of Hurricane Milton, the company’s initial BOI report is now instead due by July 1, 2025.
Similarly, the initial BOI report of a reporting company created or registered on July 25, 2024, normally would be due by October 23, 2024. If such a company has its principal place of business in an area designated both by FEMA as qualifying for individual or public assistance and by the IRS as eligible for tax filing relief as a result of Hurricane Milton, the company’s initial BOI report is now instead due by April 23, 2025.
In addition, FinCEN will work with any reporting company whose principal place of business is outside the disaster areas but that must consult records located in the affected areas to meet the deadline. Reporting companies with a principal place of business outside the affected areas and that are seeking assistance in meeting their filing obligations should contact FinCEN.
Additional information about the Reporting Rule and guidance materials are available at www.fincen.gov/boi or talk to your advisor today.