FinCEN’s BOI reporting requirements not DOA
Despite the recent high-profile court decision finding the 2021 Corporate Transparency Act (CTA) and its beneficial ownership information (BOI) reporting requirements are unconstitutional, most businesses are still subject to the act’s reporting rules. Nearly all entities created or registered in 2024 that are subject to the reporting requirements must still file a BOI report with the Financial Crimes Enforcement Network (FinCEN) within 90 calendar days of receiving notice of their creation or registration. Unless they were involved in the litigation, reporting companies created or registered before Jan. 1, 2024, must file by Jan. 1, 2025.
The confusion over whether the filing requirements are still in effect stems from a March 1 federal court decision where an Alabama judge found the CTA exceeded Congress’s power and barred the Treasury Department and FinCEN from enforcing any part of the act against the plaintiffs in the case, an Ohio small business owner and members of the National Small Business Association (NSBA). However, the judge specified that the CTA still applied to any businesses that were not members of the NSBA as of the March 1 decision date. The Justice Department appealed the decision and the appeals court could delay its implementation, which would leave the requirement that all businesses file BOI reports in place until it decides the matter.
While the litigation over the CTA’s constitutionality continues, FinCEN is complying with the court’s order and not pursuing members of the NSBA for CTA violations. However, it continues to implement the BOI reporting provisions for all other entities, as required by the CTA.
What are the reporting requirements?
Under the CTA, the entities required to file BOI reports with FinCEN include S corporations, C corporations, limited liability companies and other entities created by filing with a secretary of state or similar office in the U.S. Foreign companies formed under the laws of another country must file reports if they have registered to do business in the U.S. by filing with a secretary of state or similar state office.
Companies created or registered during 2024 must file their initial BOI report with FinCEN within 90 calendar days of receiving actual or public notice their registration is effective. Reporting companies created or registered on or after Jan. 1, 2025, must file their initial BOI reports within 30 calendar days of receiving actual or public notice that their creation or registration is effective.
All reporting businesses created or registered to do business prior to Jan. 1, 2024, must file a BOI report with FinCEN by Jan. 1, 2025.
Who is a beneficial owner?
- A beneficial owner that must be named in a BOI report is a person who either directly or indirectly:
- Exercises substantial control over the reporting company
Owns or controls at least 25% of the reporting company’s ownership interests
A beneficial owner must be an individual. Legal entities like trusts or corporations can’t be beneficial owners. However, in specific circumstances, information about an entity may be reported in lieu of information about a beneficial owner. Additional information is available in the frequently asked questions (FAQs) regarding BOI reporting on FinCEN’s website.