Corporate Transparency Act (CTA) and Beneficial Ownership Information (BOI) Reporting Requirements, Deadlines, and Penalties for Violations Explained

UPDATE – January 24, 2025:

BOI Reporting Update… the injunction is still in place.

As of January 23, 2025, a BOI injunction remains in place. While the Supreme Court granted a stay of the injunction (meaning reporting deadlines are suspended) in the Texas Top Cop Shop case, the nationwide injunction imposed in the Samantha Smith case remains in effect.

FinCEN has stated that filing BOI reporting remains voluntary.

We recommend calling us today to help gather BOI report information to be prepared if the injunction is lifted again.

UPDATE – December 30, 2024:

Fifth Circuit Halts FinCEN Reporting deadline again.

You won’t believe this! The January deadline for required small businesses to register their Beneficial Ownership Information (BOI) is on hold, once again. The Fifth Circuit Court Appeals, just three days after reinstating the BOI reporting deadline required by the Financial Crimes Enforcement Network (FinCEN), has reinstated the injunction. This injunction means that small businesses are not required to file BOI reports. We will continue to keep you updated on this issue.

UPDATE – December 23, 2024:

BOI Reporting Requirements for FinCEN are required again.

On December 23, 2024, the US Court of Appeals for the Fifth Circuit nullified the injunction issued earlier this month, which means small businesses are required to file their Beneficial Ownership Information (BOI) reports with FinCEN. For many businesses, this deadline is in a few weeks, January 13 , 2025.

Important update regarding CTA and BOI Reporting Requirements. (12/5/2024, 5:00pm EST)

A federal district court, finding that the CTA is likely unconstitutional, issued an injunction barring FinCEN from enforcing the BOI filing requirements while the case is pending.  The injunction, which according to the Court applies nationally, was issued in Texas Top Cop Shop, Inc. v. Garland, No. 4:24-CV-478 (E.D. Texas 12/3/24). Under the injunction, the CTA and the BOI reporting rule cannot be enforced, and entities formerly required to report need not comply with the CTA’s Jan. 1, 2025, BOI reporting deadline pending a further order of the court.

Although it is unlikely that the injunction will be lifted before the conclusion of the proceedings, we recommend that you prepare all necessary information for your BOI report. This way, if there is a reversal and reporting obligations resume,  you will be ready. 

The Corporate Transparency Act (CTA) and Beneficial Ownership Information (BOI) reporting requirements introduce a significant shift toward increased transparency in U.S. business practices.  For companies across the country, it is essential to comply with these regulations and avoid substantial fines and potential legal issues.

The Corporate Transparency Act (CTA) is a federal law that went into effect on January 1, 2024, that requires many U.S. small business owners to file transparency reports with beneficial ownership information.  The CTA was enacted in 2021 to combat tax fraud, money laundering, and financing for terrorism by requiring businesses to report ownership information.

Certain businesses that meet the criteria must submit a Beneficial Ownership Information (BOI) Report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

This BOI report provides the government with details to identify the individuals associated with the reporting company.  Some things that must be provided in the report are:

• the entity’s legal name and trademarks
• current U.S. address
• taxpayer identification number
• specify jurisdiction where entity formed or registered
• owners’ names, addresses, birthdays, identification numbness (license or passport)
• Company applicants
  • For companies formed on or after January 1, 2024, identify the company applicants (could be an individual or the attorney that filed the documents creating the filing of the company) and collect information to be reported for those individuals.
  • No company applicant information needs to be reported for any reporting company formed prior to January 1, 2024.

Do you have to submit a BOI? Are you a Beneficial Owner?

An individual qualifies as a beneficial owner if they directly or indirectly have a significant ownership stake in the company?

• Do you have a major influence on the company’s decisions or operations?
• Do you own at least 25% of the company’s shares?

If you answered yes to either of those questions, then you need to report a BOI.

EXPERIENCED LEGAL ADVICE YOU CAN TRUST

We are committed to investing our energy in long-lasting, fruitful relationships. Contact us today to schedule your consultation.

CALL NOW TO SCHEDULE A CONSULTATION 718-232-1250

What are the reporting deadlines?

• For qualifying reporting entities established before January 1, 2024, the filing deadline is January 1, 2025
• Qualifying reporting entities established between January 1, 2024, and January 1, 2025, will have 90 days from either the actual notice of formation or public announcement, whichever comes first to file.
• Businesses established on or after January 1, 2025, will have 30 days from notification or public announcement of their formation to submit their first report to FinCEN.
• Businesses must submit any corrections or updates to previously filed information within 30 days.

What happens if a qualifying entity fails to submit their BOI report?

• Civil penalties: companies that fail to file or submit a late BOI Report are subject to a penalty of $500 per day for each day of non-compliance
• Criminal penalties: willful non-compliance with BOI reporting requirements can lead to criminal charges, including a $10,000 fine (and/or up to two years imprisonment)

Contact us today to determine if your business is required to report and we can help prepare and file your BOI to FinCEN before the deadline.

Helpful Links:

For a full version of these rules, please see FinCen’s BOI Requirements September 30, 2022: https://www.govinfo.gov/content/pkg/FR-2022-09-30/pdf/2022-21020.pdf

And BOI Reporting Deadline Extension for Reporting Companies Created or Registered in 2024: https://www.govinfo.gov/content/pkg/FR-2023-11-30/pdf/2023-26399.pdf

To Submit your BOI Report directly to FinCen: https://boiefiling.fincen.gov/fileboir

Get more information about BOI Reporting Requirements: https://www.fincen.gov/boi

BOI FAQs: https://www.fincen.gov/boi-faqs

Penalty Information: https://www.fincen.gov/boi-faqs#K_2