Filing Deadline for Beneficial Ownership Information (BOI) is Reinstated

A decision from U.S. District Court for the Eastern District of Texas (Court) on February 18, 2025, has reinstated the filing requirements under the Corporate Transparency Act.  Generally, most businesses subject to the filing requirement will have to file their Beneficial Ownership Information (BOI) with the Financial Crimes Enforcement Network (FinCEN) by March 21, 2025.

What is the Corporate Transparency Act?
The Corporate Transparency Act was passed in 2021 to combat money laundering and organized crime funding. The CTA requires that registered businesses register any “beneficial owner” of the company with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

What Businesses are Required to File?
The BOI filing requirement applies to any small business that files an incorporating document with their state business authority to conduct business in the United States, including corporations, limited partnerships or limited liability companies (LLCs). The FinCEN classification of a “small entity” is having less than 20 employees and under $5 million in cash receipts.  Farms that operate as sole proprietorships are exempt from filing their BOI.

Who is a Beneficial Owner?
Beneficial owners include anyone with a significant stake in the company, whether or not they have direct legal ties to the business. This may include holding at least 25% of a company’s shares, having a similar level of control over the company’s equity or holding significant influence over the company’s decisions and operations (i.e., the authority to exercise substantial managerial control over the reporting company). Should a business partake in illegal activities, each such stakeholder is accountable for the crimes of the business.

What is Required for Filing?
Filings must include all personal information like addresses, birthdays and identification numbers for each owner. While this report does not have to be renewed after the initial filing, changes of address, new driver’s licenses or changes of name all require updated filings. Since having control over a business’ operations qualifies as beneficial ownership, a restructuring of job duties, even if the person does not have a legal ownership stake in the company, could also trigger requirements to file updates.

Penalties for Noncompliance
Businesses that fail to file, or do not update records when needed, could face criminal fines up to $10,000 and additional civil penalties of up to $591 per day they fail to file. If the hefty fines are not deterrence enough, failure to file could also lead to felony charges and up to two years in prison, whether or not these paperwork violations are linked to any other crime. Since these criminal risks also apply to record updating, tracking these CTA requirements could be a grey cloud for small business owners well beyond Jan. 1.

For more information, and a link to file online, see the Treasury Department’s BOI filing page at https://www.fincen.gov/boi.