Beneficial Ownership Information Report Filing Deadline Is Now Set for March 21, 2025 || Major Update
On March 2, 2025, the , the Treasury Department (in which FinCen is a Bureau) made an announcement that BOI reporting will not be required for domestically owned companies (https://home.treasury.gov/news/press-releases/sb0038).? Treasury will be re-writing the regulations to apply to foreign reporting companies only.? If you have not yet filed a BOI report, unless you are a foreign reporting company, there is no reason to do so.
February 20, 2025
On or before?March 21, 2025, your company will be required to file a brand-new report with the U.S. Treasury Department – the?Beneficial Ownership Information Report?(“BOI Report”) -- as required under the Corporate Transparency Act of 2021.
The BOI Report requirement began on January 1, 2024, as to companies already in existence on that date, with a deadline of January 1, 2025, to make the initial filing. Throughout most of 2024, I held off on advising my clients about this requirement because there had been pending litigation to try to stop this law from taking effect, and there had been pending legislation that would delay the effective date substantially. By mid-November, it was apparent to me that no legislation could be passed and the litigation channels would not succeed. At that time, my office began assembling the information which follows to help clients meet the January 1 deadline. However, on December 3, a federal court in Texas issued a preliminary injunction barring the enforcement of the Corporate Transparency Act. The U.S. Supreme Court reversed that injunction on January 23, 2025, but by then, a second federal court in Texas had issued its own preliminary injunction that barred regulatory enforcement of the Act. On February 18, 2025, the second federal court in Texas withdrew that preliminary injunction, permitting the federal government to proceed with enforcement. In response, yesterday FinCen made an announcement that any BOI report originally due any time after January 1, 2024, and not yet filed, could be filed on or before?March 21, 2025, without penalty. See [https://www.fincen.gov/sites/default/files/shared/FinCEN-BOI-Notice-Deadline-Extension-508FINAL.pdf]
There are still a number of lawsuits pending around the country that could affect the enforcement of the Corporate Transparency Act and potentially cause the March 21 deadline to be postponed further. Recently there have been bills introduced in both the House and Senate that would postpone the enforcement of the Corporate Transparency Act for an additional year in favor of making compliance easier on companies. Whether new legislation can be passed prior to March 21 cannot be known.
In light of that uncertainty, my advice is to get ready to file your initial BOI report, but do not do so yet. If the BOI report filing requirement remains enforceable on March 10, I suggest you proceed to file the BOI report. Why not wait longer? Due to the uncertainty over the last 14 months, a majority of companies who could have filed BOI reports did not do so. Can the government’s computers handle everyone trying to file at once? The foreseeable answer is, “No!” So, wait for now, but do not wait too long.
Why not do it anyway? Once you file the initial BOI, you are required to update any information that changes in that BOI within 30 days of the date of the change. This is a major weakness in the law in that whichever CPA or attorney helped you file the initial BOI will not know there was a change, and you will probably not think about it, either. Failing to update within 30 days can lead to penalties. This is why, for any clients who asked me whether to proceed to file the BOI, I told them not to.
If you are among the minority of companies who already filed a BOI report and you need to update or correct that report, you now have until March 21 to do so without penalty.
Again, my advice is to prepare to file your initial BOI report but wait until March 10 to actually file it. If there are further developments, I will update this post. To start you on your way, the following is the note I started writing in late November but did not post due to the first preliminary injunction.
Tom Erdos
About the New Law
In 2021, Congress enacted the Corporate Transparency Act in an effort to mitigate corruption, fraud, money laundering, terrorism, and funding of illicit activities enabled by corporate anonymity. As a part of this legislation, millions of companies registered or operating in the United States are required to file a Beneficial Ownership Information Report with the U.S. Department of Treasury Financial Crimes Enforcement Network (“FinCEN”). The BOI Report requires privately-registered companies to disclose certain identifying information about the company and its beneficial owners.
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When Is the First BOI Report Required?
Companies created or registered?before?January 1, 2024, must file the BOI Report by January, 1, 2025. Companies created or registered?after?January 1, 2024, must file the BOI Report within 90 days of the company's registration date. After the first initial filing, a BOI Report needs to be filed whenever information needs to be updated or corrected.
A FinCen Notice dated February 18, 2025, extended the January 1 deadline to?March 21,?2025. See?https://www.fincen.gov/sites/default/files/shared/FinCEN-BOI-Notice-Deadline-Extension-508FINAL.pdf
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Is My Company Exempt?
The statute applies to almost all companies, regardless of size. Being the sole owner of a single member LLC, even if your LLC is a disregarded entity for federal tax purposes, will not exempt you from this requirement. There are companies that are exempt from the BOI reporting requirements, such as certain nonprofits and publicly-traded companies. Of note, not even homeowners’ associations or condominium associations are exempt.
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How Do I File?
To file the Beneficial Ownership Information Report for your company, visit?https://www.fincen.gov/boi.
For questions about filing or exemptions, visit:?
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Is It Time Consuming to File a BOI Report?
Not at all. A good menu system provides step-by-step instructions to take you through it. You will need a current form of government identification. If your driver’s license expired and you do not have a current passport, you will need to get that fixed first.
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Will My BOI Report Be Made Public?
The Corporate Transparency Act directs the Treasury department to maintain beneficial ownership information in a “secure, nonpublic database” at the “highest security level” for non-classified information. The information will be available for law enforcement, but not for access by members of the general public.
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I Filed My BOI Report – What Happens Next?
You will be sorry you asked; this is not a one and done deal. From this point forward, you will need to be consistently updating the BOI report within thirty days of any of the following occurrences:
The frequency with which an update may be required has a lot to do with why I have not suggested you file the BOI report until now. Had you done so in January 2024, you may very well have encountered the need to file updates already. ?At present, any updates not made are due by March 21, 2025.
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Finally, Beware of Email Scams
Do not be fooled if you receive an email claiming your company is in violation of the Corporate Transparency Act and is facing enforcement action or penalties. Do not open the email or respond to it; it is a scam. FinCen has not yet started to enforce the new law and is not sending out any such notices.
Head of Product at Fluid
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