After months of shifted deadlines, changes in penalties, new rulings, and mass confusion for business owners, the beneficial ownership information (BOI) filing requirements debate has come to an end.
On Friday, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule significantly narrowing the scope of beneficial ownership information (BOI) filing requirements. Going forward, only foreign entities will be required to file BOI. This new rule removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act.
Final BOI Decision
Most U.S.-based business owners will no longer need to file a BOI or report their shares in any foreign reporting companies.
The interim final rule revises the definition of “reporting company” to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. state or tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). FinCEN also exempts entities previously known as “domestic reporting companies” from BOI reporting requirements.
In addition, the rule exempts foreign reporting companies from having to report the BOI of any U.S. persons who are beneficial owners of the foreign reporting company and exempts U.S. persons from having to provide such information to any foreign reporting company for which they are a beneficial owner.
Those companies that are still required to file have an additional 30 days from the most recent filing deadline of Friday, March 21, 2025. Any foreign entities that register to do business in the U.S. in the future will have 30 days to file an initial BOI report after receiving notice that their registration is effective.
BOI Reporting Deadline History
Congress passed the Corporate Transparency Act (CTA) in 2021 as a way to deter money laundering, terrorist financing, tax fraud, and other illicit activity. BOI reporting requires companies to disclose the identity and information about beneficial owners of entities. Additionally, any entity incorporated after January 1, 2024 is required to disclose the identity of “company applicants” or any individual who files an application to form a corporation, LLC, or other similar entity.
- December 2024: Federal courts in Texas started filing injunctions to temporarily block the enforcement of the CTA and this reporting rule. This moved the original filling deadline from January 1, 2025 to January 13, 2025.
- January 13, 2025: This was the original deadline for entities created prior to 2024.
- January 7, 2025 Injunction: The Eastern District of Texas issued two separate nationwide injunctions, halting the CTA and its reporting requirement.
- February 18, 2025: Both injunctions were lifted while the Fifth Circuit Court of Appeals continues to prepare to hear oral argument on the constitutionality of the CTA. FinCEN issued a 30-day delay for reporting, setting the newest deadline of March 21, 2025.
- February 27, 2025: FinCEN issues a statement that there will be no penalties or fines for not filing BOI and to expect an interim final rule no later than March 21, 2025.
- March 21, 2025: The Interim Final Rule removes the BOI requirement for U.S.-based companies.
Current law no longer requires BOI reporting for most companies. Although this process has proven that things can change, we do not expect this filing to be required in the future for U.S.-based companies. If you believe your organization needs to file, Avizo Group can assist you. We use a secure online portal that simplifies the collection of your information. Please email us at [email protected] if you would like assistance.
Erann Thompson, Principal & Director of Advisory Services
Erann collaborates closely with business owners to identify the optimal mix of accounting cloud applications, aiming to enhance efficiency and profitability for your business.
