Corporations, limited liability companies, and certain other businesses existing as of January 1, 2024, are required to file a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN) by January 1, 2025.
Update (December 10, 2024)
On December 3, 2024, a federal district court in the Eastern District of Texas issued a nationwide preliminary injunction. This order:
- Enjoins the enforcement of the Corporate Transparency Act (CTA) and its related regulations, including the beneficial ownership reporting requirements.
- Stays all compliance deadlines for submitting BOI reports under the CTA.
Following the court’s decision, the Department of Justice filed a Notice of Appeal on December 5, 2024.
Current Status:
Submission of Beneficial Ownership Information reports is now voluntary until further notice.
For the latest developments, visit the FinCEN website to review the Alert titled Impact of Ongoing Legislation – Deadline Stay – Voluntary Submission Only.
Background on the Corporate Transparency Act
The CTA, enacted in late 2021, aims to combat financial crimes by requiring certain “reporting companies” to disclose ownership information. FinCEN collects this data for authorized government and financial institutions.
Companies Required to File a Beneficial Ownership Information Report (Before the Injunction)
Businesses that must file include:
- Corporations
- Limited liability companies (LLCs)
- Limited partnerships
- Any entity formed by filing with the Secretary of State or similar state office
These entities must file a report unless they meet specific exemption criteria.
Exemptions from Filing a Beneficial Ownership Information Report
Certain types of companies are exempt from the requirement to file a Beneficial Ownership Information (BOI) report under the Corporate Transparency Act. Exempt entities include:
- Accounting firms
- Tax-exempt organizations
- Large operating companies – Defined as entities that:
- Have an active presence in the United States
- Employ over 20 individuals within the U.S.
- Generate more than $5 million in gross receipts or sales annually
Additionally, sole proprietorships and general partnerships are not subject to the reporting requirements, as they are not considered officially registered entities.
For a full list of exempt entities, refer to the Small Entity Compliance Guide on the FinCEN website, beginning on page 4.
Beneficial Ownership Reporting Requirement
As of January 1, 2024, reporting companies must file a Beneficial Ownership Information (BOI) report with FinCEN. The initial report deadlines are as follows:
- By January 1, 2025 – For companies in existence as of January 1, 2024
- Within 90 days of creation or registration – For companies established during 2024
- Within 30 days of creation or registration – For companies established after December 31, 2024
For further details, refer to page 37 of the Small Entity Compliance Guide on the FinCEN website.
How to File a Beneficial Ownership Information Report
As of January 1, 2024, reporting companies must file a Beneficial Ownership Information (BOI) report with FinCEN. The initial report deadlines are as follows:
- By January 1, 2025 – For companies in existence as of January 1, 2024
- Within 90 days of creation or registration – For companies established during 2024
- Within 30 days of creation or registration – For companies established after December 31, 2024
For further details, refer to page 37 of the Small Entity Compliance Guide on the FinCEN website.
How to File a Beneficial Ownership Information Report
Companies must file the Beneficial Ownership Information (BOI) report electronically through FinCEN’s online filing system. For step-by-step instructions, visit the BOI E-Filing Help and Resources page on the FinCEN website.
Penalties for Non-Compliance or False Reporting
Failure to file a BOI report, keep it up-to-date, or intentionally submitting false information can result in severe penalties:
- $500 per day for each day the violation continues
- Maximum penalty of $10,000 and/or up to 2 years of imprisonment
For More Information
See the following for more information:
- Beneficial Ownership Information Reporting – Frequently Asked Questions
- Small Entity Compliance Guide
- An Introduction to Beneficial Ownership Information Reporting
- Beneficial Ownership Information Reporting Quick Reference Page on FinCEN
- Small Business Resources page
- FinCEN – Beneficial Ownership Information main page
