Corporate Transparency Act:
New Beneficial Ownership Information Reporting
New Deadline March 21, 2025
Beneficial Ownership Information [BOI] reporting under the Corporate Transparency Act [CTA] is again required, with a new reporting deadline of March 21, 2025, for most companies. For more information on BOI click here.
What is Beneficial Ownership Information [BOI] Reporting?
Companies in the United States must report information about their beneficial owners—the individuals who ultimately own or control the company—to the Financial Crimes Enforcement Network [FinCEN], a bureau of the U.S. Department of the Treasury. This reporting requirement is part of the Corporate Transparency Act (CTA), which was enacted to prevent corrupt entities from laundering illicit funds through anonymous companies in the United States, specifically to combat illicit activity such as tax fraud, money laundering and financing for terrorism.
Who has to report?
- Most active corporations, LLCs, and other businesses formed by filing a document with a Secretary of State’s office in the United States. But there are many exceptions. You may Contact FinCEN to confirm whether your business is required to report or speak to your financial expert, like an accountant.
Who does not have to report?
- Publicly traded companies, banks and other financial institutions, tax-exempt nonprofits, public utilities, and some large businesses. These are already subject to other regulatory requirements.
How do I report, and whose information?
- Reporting companies will report beneficial ownership through FinCEN’s website. There is no fee for submitting this report.
What happens if I do not report??
- If a business fails to comply with BOI reporting requirements, they can be subject to civil penalties per day and criminal penalties, including fines of $500 per day and/or imprisonment.
Will there be other rulings and court actions on this matter?
Likely, but for now, reporting is mandatory.
- On January 7, 2025, the U.S. District Court for the Eastern District of Texas issued an order staying FinCEN’s regulations implementing the BOI reporting requirements, precluding FinCEN from requiring BOI reporting or otherwise enforcing the CTA’s requirements.
- On February 5, 2025, the U.S. Department of Justice—on behalf of Treasury—filed a notice of appeal of the district court’s order and, in parallel, requested a stay of the order during the appeal.
- On February 18, 2025, the court agreed to stay its January 7, 2025, order until the appeal is completed. Given this decision, FinCEN’s regulations implementing the BOI reporting requirements of the CTA are no longer stayed. Thus, subject to any applicable court orders, BOI reporting is now mandatory, but FinCEN is providing additional time for companies to report.
Highlights and Details
- Reporting companies can report their beneficial ownership information directly to FinCEN, free of charge, using FinCEN’s E-Filing system available at https://boiefiling.fincen.gov. More information is available at https://www.fincen.gov/boi.
- 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 were previously given a reporting deadline later than the March 21, 2025 deadline must file their initial BOI report by that later deadline. For example, if a company’s reporting deadline is in April 2025 because it qualifies for certain disaster relief extensions, it should follow the April deadline, not the March deadline.
- Beneficial ownership information reporting is not an annual requirement. Unless a company needs to update or correct information, a report only needs to be submitted once.
Cardinal Services Disclaimer
None of the information stated above is intended to be legal, tax, security, or financial advice.
Cardinal Services provides the information in this e-newsletter for general guidance only and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation.
Consult your company’s legal counsel or financial professional for the latest city, county, state or federal laws concerning this newsletter topic.