On Tuesday, the Financial Crimes Enforcement Network (FinCEN) announced that Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are back in effect following a ruling in Smith, et al. v. U.S. Department of the Treasury, et al. This decision means that most reporting companies are once again required to file their BOI reports, a key compliance requirement aimed at increasing corporate transparency and combating financial crimes. The full announcement from FinCEN can be accessed here.
New Deadline: March 21, 2025
To ease the transition, FinCEN has extended the filing deadline for most reporting companies to March 21, 2025. FinCEN has also indicated that it will provide an update before this date regarding any potential further extensions. This extension grants companies more time to understand and comply with the reporting obligations.
Key Takeaways from FinCEN’s Announcement
- 30-Day Assessment Period: FinCEN will use this time to evaluate possible modifications to filing deadlines, prioritizing reporting for entities that pose the most significant national security risks.
- Future Revisions to BOI Rules: FinCEN plans to initiate a process this year to amend the BOI reporting rules. The goal is to reduce the reporting burden on lower-risk entities, which could include many U.S. small businesses.
Summary of BOI Filing Requirements
Businesses required to report under the CTA must provide specific information about their beneficial owners, which includes individuals who:
- Own or control at least 25% of the company’s ownership interests; and
- Exercise substantial control over the entity.
The required information includes:
- Full legal name;
- Date of birth;
- Residential or business address;
- A unique identifying number from an official government document (such as a passport or driver’s license).
For more details on the specific filing requirements, please refer to the official BOI reporting rule.
How Did We Get Here?
The reinstatement of BOI filing requirements follows a series of legal proceedings, including:
- Supreme Court Stay in Texas Top Cop Shop v. Garland et al.: The Supreme Court granted a stay of the injunction in this case, pending appeal, leading many to anticipate the immediate return of BOI filing requirements.
- Separate Injunction in Smith v. Treasury: Despite the Supreme Court’s ruling, a separate injunction in Smith had paused the enforcement of BOI requirements.
- Tuesday’s Ruling in Smith Lifted the Injunction: With this latest ruling, BOI reporting obligations are now reinstated for most reporting companies.
What Should Companies Do Now?
For companies that have not yet filed their BOI reports, I strongly recommend preparing to meet the March 21, 2025 deadline. However, FinCEN is accepting early filings, so companies that are ready to submit their reports can do so now.
Final Thoughts
This latest ruling reinforces the importance of BOI reporting under the CTA. While FinCEN is considering ways to ease the compliance burden for lower-risk entities, companies should not delay in understanding their obligations. Given the possibility of further regulatory updates, it’s crucial for companies to stay informed and consult a qualified attorney to ensure compliance.
Though it is possible there will be another injunction or other legal actions delaying or preventing enforcement of the CTA, it probably makes sense just to file to avoid needing to keep track of this legal wrangling so you can just continue to focus on your business.
