The clock is ticking for businesses required to comply with the Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA), Forbes reports.
Following a federal appeals court decision on December 23, 2024, the US Department of the Treasury’s Financial Crimes Enforcement Network (FINCEN) has reinstated the BOI filing deadline, now extended to January 13, 2025.
The timeline for compliance was briefly in flux due to a nationwide preliminary injunction issued by a US District Court in December 2024, which prohibited FINCEN from enforcing the BOI reporting requirements. However, the Fifth Circuit Court of Appeals overturned that injunction in Texas Top Cop Shop, Inc. v. Garland, asserting that the CTA is likely constitutional under Congress’ Commerce Clause powers.
The CTA aims to combat money laundering, terrorism financing, tax fraud, and other crimes by requiring businesses to disclose ownership information. Although additional legal challenges to the law persist, the Fifth Circuit’s decision affirms its enforceability for now.
To accommodate businesses affected by the injunction, FINCEN announced an adjusted timeline:
- Companies formed before January 1, 2024: Must file initial BOI reports by January 13, 2025 (previously January 1, 2025).
- Companies formed between September 4, 2024, and December 23, 2024: Have until January 13, 2025, or 21 days from their original deadline, whichever is later.
- Companies formed on or after January 1, 2025: Must file BOI reports within 30 days of their formation.
- Disaster relief-qualifying entities: May receive additional extensions based on specific circumstances.
Exceptions remain for certain plaintiffs in ongoing litigation, including entities associated with the case National Small Business United v. Yellen.
FINCEN’s BOI reporting requirements demand that businesses disclose information about individuals with substantial ownership or control. Noncompliance can result in significant penalties, making timely action essential.
For those yet to file, the message is clear: take advantage of the extension to ensure compliance and avoid penalties. The updated deadline offers a critical window to complete the process and ensure adherence to this important regulatory measure.
