As of March 21, most U.S. businesses are required to file Beneficial Ownership Information (BOI) reports under the Corporate Transparency Act (CTA). This follows recent court rulings that lifted nationwide injunctions, clearing the way for the U.S. Department of the Treasury and FinCEN (the Financial Crimes Enforcement Network) to enforce these requirements.
What is the Corporate Transparency Act?
The CTA was enacted to combat money laundering, terrorist financing, and other forms of financial crime by increasing transparency of company ownership. It requires reporting companies to disclose their beneficial owners—individuals who directly or indirectly
- Own or control at least 25% of the company; or
- Exercise substantial control over the company’s operations or decisions
This information must be reported to FinCEN and will be kept in a secure, non-public database accessible only to authorized government authorities and financial institutions conducting due diligence.
Who Needs to File
Most U.S. businesses are required to report, including
- Corporations, LLCs, and other entities created or registered in the U.S.
- Foreign entities doing business in the U.S
Exemptions include
- Publicly traded companies
- Certain regulated entities, like banks and insurance companies
- Inactive entities meeting specific criteria
Why is This Important Now?
Since December 2024, the CTA’s filing deadlines were on hold due to nationwide injunctions. These injunctions have now been lifted, following the Smith v. Treasury case in the 5th Circuit, allowing FinCEN to enforce the deadlines again
- Pre-‘24 Companies (formed before January 1, 2024) and New Companies (formed on or after January 1, 2024) are required to file by March 21.
- Companies involved in National Small Business United v. Yellen are currently exempt from reporting.
What Should You Do Now
If you were waiting for legal challenges to be resolved before filing, the wait is over. We strongly recommend proceeding with your CTA filing to avoid potential penalties
- Identify your beneficial owners and gather their information, including name, date of birth, address, and a unique identifying number (e.g., driver’s license or passport number).
- Submit your BOI report through FinCEN’s online filing portal, which is free and designed to be user-friendly.
- Consult your accountant or legal representative to ensure compliance.
Potential Legislative Change
While Congress is considering a bill to extend the filing deadline for Pre-‘24 Companies to January 1, 2026, this legislation has not yet passed. Therefore, it is safest to proceed with the March 21, 2025 deadline in mind.
This blog post is not offered, and should not be relied on, as legal advice. You should consult an attorney for advice in specific situations.
