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Beneficial Ownership Information (BOI) Filing Deadline and Compliance Requirements

Dec 16, 2024 | Blog

Beneficial Ownership Information (BOI) Reporting Requirement

Critical upcoming deadline for compliance with the mandated by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

Who Must File

The BOI reporting requirement applies to most legal entities registered to do business in the United States, such as LLCs, corporations, and other entities formed by filing with a Secretary of State or similar office.

A list of exempt entities is available at the FinCEN FAQ page.

Filing Deadlines

  • Entities Created Before January 1, 2024: File your BOI report by December 31, 2024.
  • Entities Create in 2024.  File your BOI report within 90 calendar days of formation.
  • Updates or Corrections: Submit any changes to previously filed information within 30 days.
  • Entities Created or Registered on or After January 1, 2025: File the BOI report within 30 days of registration.

For more information, please see below:

 CORPORATE TRANSPARENCY ACT FILING

Filing deadline: January 1, 2025

Businesses required to report Beneficial Ownership Information under the Act are entities within and outside the United States and are corporations including Limited Liability Companies (LLC’s) or similar entities created by filing of a document with the Secretary of State or any similar offices under the law of the State or Indian tribe. Foreign entities formed under the law of a foreign country and registered to do business in any county or tribal jurisdiction by filing a document with the Secretary of State or any similar office are also required to file.

There are twenty-three (23) Exemption Categories – see a few examples below:

  • public traded corporations
  • banks and credit unions
  • securities brokers/dealers
  • public accounting firms
  • tax exempt entities
  • inactive entities
  • large operating entities –
    • which employ twenty or more people in the US
    • have gross revenues of over $5M

Steps to file a FinCEN (Financial Crimes Enforcement Network) Report to comply with the Corporate Transparency Act.

  1. Identify beneficial owners:
    1. Determine individuals who directly or indirectly own 25% or more of the equity interests in your business.
    2. Include controlling shareholder(s) who have substantial control over your business including all senior management personnel.
  2. Gather necessary information on each beneficial owner:
    1. Companies must report the full name(s) of the reporting company, any trade or Doing Business As (DBA) names, business address, state or jurisdiction information, and IRS taxpayer number (TIN/EIN).
    2. Collect accurate and up-to-date information on beneficial owners, including their full legal names, dates of birth, residential addresses, and Social Security numbers or passport numbers.
    3. Regular updates and changes to this information must be reported on a timely basis or fines will be imposed.
  3. Submit a report to FinCEN:
    1. Deadlines
      • New entities created in 2024 – must file 90 days after creation
      • Existing entities created before January 1, 2024 – must file by January 1, 2025
      • After January 1, 2025 – deadline for new entity filing is 30 days after creation
    2. File the required beneficial ownership information electronically through FinCEN’s secure system within the specified time to avoid penalties for non-compliance. The deadline for filing for existing entities which are required to file is January 1, 2025. It is estimated that there are thirty-five million businesses who must file this year, and to date, only two million have done so. There will be a “crush” to file at the year end and we advise you to do so immediately.
  4. Risks of not filing on time or improperly:
    1. The penalty for failing to file is a fine of up to $10,000 and/or a maximum of two (2) years of imprisonment. If the entity required to file does so after the deadline, it may face a civil penalty of not more than $500 per day per violation.

Special Cautions for Trusts that hold LLC interests such as real estate LLC’s If LLC shares are held in a Trust, the Trust may also be considered a beneficial owner(s) to be listed. If the Trustee(s) of that Trust has substantial control of the property held in the LLC and can make important decisions on the management of the property, the Trustee(s) may also need to be listed as a beneficial owner(s) in the FincCEN reporting.

Grimaldi Yeung Law Group LLP will not be providing services or guidance for filing the FinCEN reports described in this handout, which is for education and informational purposes only. For more information, please visit FinCEN (Financial Crimes Enforcement Network) via www.fincen.gov regarding the mandatory filing.

We had informed our clients on December 14th that many corporate  entities were obligated to register the names of all corporate owners and other  information to FinCen by the end of this year.  Recently a Texas Federal Court granted a preliminary injunction. This decision has halted the enforcement of the CTA compliance requirements due to concerns about its impact on small businesses and its constitutionality. For those who have not yet filed, this ruling put a hold on the need to file. If the decision is over-turned, the requirement to file will be reinstated for all who had not filed.

We will keep you informed of the Court’s final decision.

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