Breaking News: BOI Reporting Enforceable with Minor Extension

BOI Reporting Now Enforceable

As a last-minute Holiday gift, the U.S. Court of Appeals granted a Stay on the preliminary injunction previously issued on December 3^rd, 2024. The result of this stay is that the new Beneficial Ownership Information (BOI) Reporting Requirements are back in effect.

The Financial Crimes Enforcement Network (FinCEN) has granted a minor extension for companies that may have previously relied upon the lower court’s injunction. Most Reporting Companies will be subject to the new deadline of January 13, 2025. See below for further deadlines:

Companies that qualify for disaster relief may have further extensions available. See FinCEN’s BOI webpage for more information: https://www.fincen.gov/boi

What is the Beneficial Ownership Information Reporting

Introduced as part of the Corporate Transparency Act through the Anti-Money Laundering Act of 2020, the aim of the new Beneficial Ownership Information Reporting requirement is to reduce terrorist financing, money laundering and other illegal activity. While this new law targets multi-level private entities, many small businesses and potentially trusts will also be subject to this new reporting.

Unlike tax or foreign bank account reporting, this specific disclosure is a separate requirement. Instead, it will be triggered upon the establishment and registration of a new business or when there is a change in the beneficial ownership or individuals with substantial control.

Reporting entities failing to provide this information in a timely manner may incur penalties, including $500 per day for civil penalties and a $10,000 fine and possible imprisonment in criminal penalties. Safe Harbors are allowed for reporting entities who act in good faith to correct inaccurate information within 90 days.

Determining Whether To File Beneficial Ownership Information

While BOI reporting provides numerous exemptions from filing, most exemptions apply to industries that already submit Beneficial Ownership Information under other regulations, including banks and credit unions, insurance companies, and public companies. All entities should review the reporting requirements and related exemptions; however, the following entities, in particular, should familiarize themselves with these new regulations:

• Small business entities with fewer than 20 employees or less than $5 million in revenue
• Holding entities for operating businesses or real estate investments
• Foreign-owned entities
• Newly established businesses
• Trusts created by the filing of a document with a secretary of state or similar office
• Entities awaiting tax-exempt status

For further information on common exemptions and a summary of the reporting requirements, please review this document drafted by the RKL Team. FinCEN provides further Small Business Resources on their website.

RKL partners with a variety of law firms and service providers capable of helping clients fulfill their BOI reporting obligation. For more information about these providers, please contact your RKL advisor.