On February 18, a decision by the U.S. District Court for the Eastern District of Texas ruled that the beneficial ownership information (BOI) reporting requirements are once again in effect. As a result, the deadline for reporting has been extended for most companies to March 21, 2025.
For the latest official updates, please visit FinCEN’s website.
The Corporate Transparency Act (CTA) is a federal law that requires certain businesses to disclose information about their beneficial owners. The CTA aims to prevent money laundering, terrorist financing, corruption, and tax fraud. It also aims to protect national security interests and interstate and foreign commerce.
FinCEN – Many companies are required to report information to FinCEN (Financial Crimes Enforcement Network) about the individuals who ultimately own or control them. FinCEN began accepting reports on January 1st, 2024.
How to File:
Who must comply
The CTA applies to:
- Domestic entities
- Foreign entities registered to do business in the U.S.
- Most small and medium-sized businesses
- Certain new and existing corporations and limited liability companies
What must be disclosed
The CTA requires businesses to file a Beneficial Ownership Information (BOIR) report with the Financial Crimes Enforcement Network (FinCEN). The BOIR must include the names, addresses, and identification details of the business’s beneficial owners.
Penalties
Failure to comply with the CTA may result in civil and/or criminal penalties, including:
- A fine of up to $10,000
- Imprisonment for up to 2 years
- A daily penalty of $591, adjusted for inflation
Filing requirements
Businesses must file an initial BOIR and update it when there are changes. Changes that may require an update include:
- A beneficial owner’s address changes
- A beneficial owner’s name changes due to marriage or divorce
- A beneficial owner obtains a new driver’s license
- Operational changes
- A new delegation of authority