Although Congress ruled that BOI reporting is deemed unconstitutional, it is not yet canceled. The bill passed says:

The bill extends the deadline for companies to report ownership information to the Department of the Treasury's Financial Crimes Enforcement Network (FinCEN). Specifically, existing companies must file their initial ownership report within two years (current regulations require the report within one year). New companies must file their initial ownership report within 90 days (current regulations require the report within 30 days). Companies must report updates or changes in ownership within 90 days (current regulations require companies to report such changes within 30 days). [https://www.congress.gov/bill/118th-congress/house-bill/5119]

Therefore, we suggest if you are a new company to file within the allotted timeframe of 90 days. If we opened a company for you in 2024, we will handle this for you. If your company was created in 2023 and prior, we suggest you consider whether you want to file now or wait a few months to see how the lawsuit settles. Currently, companies registered in 2023 and prior have until the end of 2024. Please contact us if you would like us to file this report for you no later than August 2024.

What is Beneficial Ownership Information Reporting?

You are required to file identifying information about the individuals who directly or indirectly own or control your company with the Financial Crimes Enforcement Network in order to satisfy requirements under the Corporate Transparency Act.

The Beneficial Ownership Information Reporting Rule goes into effect Jan. 1, 2024, and it’s important to understand this new law given the severity of criminal and civil penalties for failure to file, which include imprisonment and fines.

What is the Beneficial Ownership Information Reporting Rule?

The Beneficial Ownership Information Reporting Rule under the Corporate Transparency Act is a new filing requirement of the Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Department of the Treasury.

The rule creates transparency around company ownership structures and helps the federal government prevent financial crimes and fraud, such as money laundering, corruption, human trafficking, drug trafficking, tax fraud, and fraud against employees, customers, and other businesses.

Beneficial ownership information reporting supports the ongoing focus and efforts of the U.S. government to deter corporations who would hide or benefit from actions that harm others.

Who is a beneficial owner?

A beneficial owner under the Corporate Transparency Act is an individual who directly or indirectly: (1) owns or controls at least 25% of your company’s ownership interests, or (2) exercises substantial control over your business. Common examples of someone that exercises substantial control can include the following:

An important decision-maker for the reporting company
A senior officer (president, chief executive officer, chief financial officer, general counsel, chief operating officer, or any other officer with a similar function)
An individual with the authority to appoint or remove certain officers or a majority of directors (or similar body) of the company

What are the penalties for not filing?

Each business is responsible for filing a Beneficial Ownership Information Report which includes all of the individuals who control or own the business. However, a beneficial owner of a business who willfully fails to follow the reporting requirement and filing rules, or who misleads the Financial Crimes Enforcement Network, will face personal liability in the form of both criminal and civil penalties for noncompliance with the Corporate Transparency Act.

Failure to comply can lead to criminal penalties of imprisonment for up to two years and/or a fine of up to $10,000, and a civil penalty of up to $500 per day.

Even if a reporting company files the report on time, penalties can be imposed if the report does not include the correct information. It is critical that the reporting company’s filing is accurate. We can help you ensure accurate filing with a simplified reporting and filing process, satisfying the relevant law.

When is the Beneficial Ownership Information Report deadline?

The Beneficial Ownership Information Reporting Rule went into effect Jan. 1, 2024, so it’s important to get informed now about how to satisfy the requirements. The deadline varies depending on your date of formation, which we can help you determine, and we can help you stay on top of the process with notifications leading up to your filing deadline.

Generally, business entities formed before Jan. 1, 2024 will have until Dec. 31, 2024 to file. Business entities formed on or after Jan. 1, 2024 will have 90 days after formation to file. Business entities that amend their formation documents on or after Jan. 1, 2024 will have 30 days to submit a new report.

Taking care of this requirement will help you avoid criminal and civil penalties for failing to comply, including imprisonment for up to two years, a fine of up to $10,000, and/or a fine of up to $500 per day.