Written by Oded Kadosh, Guy Milhalter , and Austin Ochoa
Companies created before January 1, 2024 that are not subject to an exemption must file their Beneficial Ownership Information (BOI) report not later than January 1, 2025 to comply with the Corporate Transparency Act (CTA). Enforced by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), the CTA requires non-exempt reporting companies to disclose detailed information about their beneficial owners and, in some cases, their company applicants.
For more information and a detailed overview of the BOI reporting requirements, please refer to our previous article, “The Beneficial Ownership Information Reporting Rule: Navigating the Essentials”.
As 2024 comes to an end, non-exempt companies that haven’t yet filed their BOI reports should take note—the filing deadline is quickly approaching. For those planning to form a new entity in 2025, it’s important to know that any reporting company created on or after January 1, 2025, must file a BOI report within 30 days of receiving notice of its formation.
While the reporting process is generally straightforward, determining whether a company qualifies for an exemption and identifying the beneficial owners who must be reported can be complicated.
What are the filing deadlines?
Beginning January 1, 2024, all non-exempt reporting companies—including corporations, LLCs, and other entities created or registered to do business in the United States—are required to submit BOI reports to FinCEN.
The filing deadlines vary based on a reporting company’s creation date:
- Companies created before January 1, 2024 must file a BOI report not later than January 1, 2025.
- Companies created in 2024 are required to file within 90 calendar days of the date of receipt of actual notice of creation.
- Companies created on or after January 1, 2025 are required to file within 30 calendar days of the date of receipt of actual notice of creation.
Who must file?
The BOI reporting requirements apply to both domestic and foreign reporting companies. A “reporting company” is defined as a corporation, limited liability company, or other entity that is: (i) created by the filing of a document with a secretary of state or any similar office under the law of a State or Indian Tribe; or (ii) formed under the law of a foreign county and registered to do business in any State or tribal jurisdiction by the filing of a document with a secretary of state or any similar office under the law of a State or Indian tribe.
Who is considered a beneficial owner?
A beneficial owner is defined as “any individual who, directly or indirectly, either exercises substantial control over such reporting company or owns or controls at least 25 percent of the ownership interests of such reporting company.”
What information must be reported?
Non-exempt reporting companies must provide details about the company, its beneficial owners, and in some cases, its company applicants.
The report must include the following information about the reporting company:
- Full legal name of the company
- Any trade name or “doing business as” (DBA) name
- Current address:
- For U.S.-based companies: street address of the principal place of business in the U.S.
- For foreign companies: street address of the primary U.S. business location
- Jurisdiction of formation (State, Tribal, or foreign)
- For foreign companies: the U.S. jurisdiction of initial registration
- Taxpayer Identification Number (TIN) or, for foreign companies without a TIN, a tax ID number issued by their home country and the name of that jurisdiction
Additionally, the report must include the following information about each beneficial owner, and in some cases, the company applicant:
- Full legal name
- Date of birth
- Current address
- A unique identifying number from one of the following non-expired documents:
- S. passport
- State-issued ID
- State-issued driver’s license
- Foreign passport (if none of the above are available)
- An image of the document showing this identifying number must also be included
Important Note: Reporting companies created before January 1, 2024, are exempt from reporting information about company applicants.
What are the penalties for non-compliance?
Willfully violating the BOI reporting requirements can result in:
- Civil penalties: Up to $500 per day for ongoing violations (adjusted annually for inflation)
- Criminal penalties: Up to two years in prison and a fine of up to $10,000
Potential violations include willfully failing to file a BOI report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.
Will the BOI filing requirement be enforced?
With legal challenges to the BOI reporting requirement, efforts in Congress to repeal the CTA, and potential regulatory changes after the 2024 elections, companies might question whether it’s worth the time and effort to file the BOI report. However, until a court blocks enforcement of the CTA or Congress repeals it, the filing requirements remain in place, and willful non-compliance can result in serious penalties.
For assistance or questions regarding your BOI reporting obligations, please do not hesitate to contact us.
