The freeze on Beneficial Ownership Information (BOI) reporting has at last been lifted, with the federal government reinstating its enforcement of the Corporate Transparency Act (CTA).
Covered entities must act now to comply with the regulations and avoid penalties. The article outlines the new updates, deadlines, and compliance measures that companies must take.
BOI Reporting Requirements Restored
Following a temporary legal injunction, the BOI reporting requirement is reinstated. The Financial Crimes Enforcement Network (FinCEN) has stated that corporations which fall under the reporting requirement must submit their reports with no delay. The new due date for almost all reportable companies now stands on March 21, 2025.
Key Points from the Government’s Release
- The previous temporary injunction suspending BOI reporting has been lifted as of February 18, 2025.
- FinCEN has postponed the BOI reporting deadline to March 21, 2025, to provide additional time for companies.
- Companies with previously established deadlines prior to March 21, 2025, based on exemptions (e.g., disaster relief extensions) must adhere to their originally provided deadlines.
Specific businesses engaged in ongoing litigation, like those falling under the case of National Small Business United v. Yellen, are also exempted on a temporary basis from filing.
Who Has to File a Report?
BOI reporting applies to corporations, LLCs, and other such companies registered in the U.S., except those who are exempted. The reportable entities need to provide data on their beneficial owners, such as persons having at least 25% control of the firm or significant influence over the company.
Information to be Included in BOI Reports
Mandatory entities are required to submit the following information:
- Beneficial owner(s) full legal name
- Date of birth
- Current residence address
- A government-issued ID number (such as passport or driver’s license)
Compliance Strategies for Business
To ensure that they don’t have issues and to avoid any reporting mistakes at the last minute, businesses must:
- Check Their Filing Requirements – Ensure the entity is covered under the BOI reporting requirements.
- Gather Owner Info in Advance – Prepare all the required personal and business details ahead of time to submit.
- File in Advance of Deadline – File reports through FinCEN’s online reporting portal ahead of the deadline to be exempt from penalty.
Penalties for Non-Compliance
Companies that fail to file their reports are liable to the following harsh penalties:
- Civil penalties of up to $500 per day for late or incorrect filings
- Criminal penalties of up to $10,000 and/or imprisonment for wilful violations
Conclusion
Since the BOI reporting requirements are again in effect, companies must act quickly to become compliant. The reinstatement of the Corporate Transparency Act’s requirements underscores the importance of financial transparency and regulatory compliance.
Companies should take the initiative to meet filing deadlines and avoid penalties. Stay informed, plan well ahead, and ensure your company adheres to FinCEN’s reporting guidelines.