BOI Reporting Deadline Reinstated!

[Ashish Acharya]

The Beneficial Ownership Information (BOI) reporting requirement under the Corporate Transparency Act is back in effect following the recent reversal of a federal court injunction. Businesses must act quickly to meet compliance deadlines and avoid severe penalties.

What is the BOI Reporting Requirement?

The BOI reporting requirement mandates U.S. businesses to disclose ownership details to the Financial Crimes Enforcement Network (FinCEN). This rule aims to enhance transparency and combat financial crimes.

Who Must Report?
Most entities formed or registered to do business in the U.S., including:

1. Corporations

2. Limited Liability Companies (LLCs)

3. Other Similar Entities

Exemptions include publicly traded companies, government entities, and certain large operating businesses.

What Information Needs to Be Disclosed?
Entities must report the following details about their beneficial owners:

1. Full name

2. Date of birth

3. Current address

4. Government-issued ID number (e.g., passport or driver’s license)

Beneficial Owners include individuals with at least 25% ownership or substantial control of the entity.

Key Deadlines to Know

A. January 1, 2025: For entities existing as of January 1, 2024.

B. January 13, 2025: For entities existing after January 1, 2024.

C. Within 30 Days of Formation: For entities formed in 2025.

D. Within 30 Days of a Change: For updates to previously reported information.

E. Within 90 Days of Formation: For new entities formed in 2024 (some counties in Florida have extensions due to natural disasters).

Why This Matters

Failure to comply can result in severe penalties:

A. $591 per day in civil penalties.

B. $10,000 in criminal penalties.

C. Up to two years in prison.

What’s New?

1. Court Decision: The Fifth Circuit Court of Appeals has reinstated the reporting requirement effective December 23, 2024, reversing the prior injunction.

2. Advocacy Efforts: While the AICPA and other organizations continue to advocate for a delay, the filing deadlines remain in place.

How to Stay Compliant

1. Prepare Now: Gather required information about your beneficial owners.

2. Submit on Time: Use FinCEN’s online portal to file your BOI report.

3. Stay Updated: Monitor changes to the deadlines, especially if you operate in disaster-affected areas like Florida.