New Government Rule for Business Owners
An update for businesses who must file a beneficial ownership information report.
Learn more about filing
The bipartisan Corporate Transparency Act, enacted in 2021 to curb illicit finance, requires many companies doing business in the United States to report information about the individuals who ultimately own or control them.
Recently, the enforcement landscape surrounding the Corporate Transparency Act (CTA) has taken another sharp turn. A nationwide stay on enforcing the CTA, which was issued only 20 days ago, has now been lifted. This decision clears the way for FinCEN to enforce the rules requiring legal entities to register their beneficial owners. The big question on everyone’s mind is, "What about the January 1, 2025 deadline?" The good news is that the deadline has been extended—but not by much. Here’s the breakdown of everything compliance professionals and financial institutions need to know about the updated timelines and enforcement steps.
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued an order granting a preliminary injunction, effectively pausing the federal government’s enforcement of the CTA. This injunction was meant to provide time to assess the constitutionality of the CTA’s registration requirement.
However, on December 23, the U.S. Court of Appeals stepped in to reverse this. The court granted a stay of the previous injunction, which allows FinCEN to proceed with enforcement. This swift reversal means reporting companies must once again prepare to file their beneficial ownership information (BOI) reports. And although the timeline has been adjusted for some, swift action is still required.
FinCEN has announced updated reporting deadlines for various categories of entities. Here’s what has changed:
Plaintiffs associated with this case, including Isaac Winkles and certain reporting companies under his ownership, as well as members of the National Small Business Association (as of March 1, 2024), are currently exempt from reporting their BOI to FinCEN.
Beneficial ownership information reporting is not an annual requirement. A report only needs to be submitted once, unless the filer needs to update or correct information. Generally, reporting companies must provide four pieces of information about each beneficial owner:
Recently, the enforcement landscape surrounding the Corporate Transparency Act (CTA) has taken another sharp turn. A nationwide stay on enforcing the CTA, which was issued only 20 days ago, has now been lifted. This decision clears the way for FinCEN to enforce the rules requiring legal entities to register their beneficial owners. The big question on everyone’s mind is, "What about the January 1, 2025 deadline?" The good news is that the deadline has been extended—but not by much. Here’s the breakdown of everything compliance professionals and financial institutions need to know about the updated timelines and enforcement steps.
Key Events Leading to the Update
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued an order granting a preliminary injunction, effectively pausing the federal government’s enforcement of the CTA. This injunction was meant to provide time to assess the constitutionality of the CTA’s registration requirement.However, on December 23, the U.S. Court of Appeals stepped in to reverse this. The court granted a stay of the previous injunction, which allows FinCEN to proceed with enforcement. This swift reversal means reporting companies must once again prepare to file their beneficial ownership information (BOI) reports. And although the timeline has been adjusted for some, swift action is still required.
Updated Reporting Deadlines
FinCEN has announced updated reporting deadlines for various categories of entities. Here’s what has changed:- Existing Companies: Reporting companies created or registered before January 1, 2024, must file their initial BOI reports by January 13, 2025. Originally, the deadline was set for January 1, 2025.
- Post-September 2024 Entities: Companies created or registered in the U.S. on or after September 4, 2024, that had a filing deadline falling between December 3, 2024, and December 23, 2024, now also have until January 13, 2025, to file.
- Entities Registered During December 3–23, 2024: Companies created or registered from December 3, 2024, to December 23, 2024, are granted an additional 21 days from their original filing deadline.
- Disaster Relief Extensions: Reporting companies qualifying for disaster relief may file beyond January 13, 2025, depending on their unique circumstances. These businesses should comply with whichever deadline falls later.
- Future Registrations (Post-January 1, 2025): Entities created or registered after January 1, 2025, will have 30 days to file BOI reports once their formation or registration is effective.
Plaintiffs associated with this case, including Isaac Winkles and certain reporting companies under his ownership, as well as members of the National Small Business Association (as of March 1, 2024), are currently exempt from reporting their BOI to FinCEN.
Additional Information
Beneficial ownership information reporting is not an annual requirement. A report only needs to be submitted once, unless the filer needs to update or correct information. Generally, reporting companies must provide four pieces of information about each beneficial owner:- Name;
- Date of Birth;
- Address; and
- The identifying number and issuer from either a non-expired U.S. driver’s license, a non-expired U.S. passport, or a non-expired identification document issued by a State (including a U.S. territory or possession), local government, or Indian tribe. If none of those documents exist, a non-expired foreign passport can be used. An image of the document must also be submitted.
- The company must also submit certain information about itself, such as its name(s) and address. In addition, reporting companies created on or after January 1, 2024, are required to submit information about the individuals who formed the company (“company applicants”).
- FinCEN is committed to providing America’s small businesses with the resources and information they need to make filing as quick and easy as possible. FinCEN’s Small Entity Compliance Guide walks small businesses through the requirements in plain language. Filers can also view informational videos and webinars, find answers to frequently asked questions, connect to the contact center, and learn more about how to report at www.fincen.gov/boi.
Patriot Bank is a full-service financial institution with branches in the Connecticut counties of Fairfield and New Haven, as well as in Scarsdale, New York.