As we await the effective date of the Corporate Transparency Act (CTA) on January 1, 2024, FinCEN has been busy reviewing the public’s comments on the reporting requirements imposed by this legislation. FinCEN has issued a final rule to amend the CTA’s compliance deadlines. If you recall, the CTA is a new federal law that will require registered entities, such as Limited Liability Companies, Corporations, Partnerships, etc., to file a Beneficial Ownership Information Report beginning the effective date. For more on basic information on the CTA , please visit our previous blog post here.
Each company is responsible for making sure they are compliant by the deadline. The deadline for filing a Beneficial Ownership Information Report depends on when the entity is created. If the Reporting Company was created before January 1, 2024, the deadline is January 1, 2025.[i] FinCEN has not changed this deadline. If at any time the most recent BNI report becomes inaccurate, the Reporting Company must file an updated report within thirty (30) calendar days from the date that the change occurred.[ii] FinCEN has not changed this deadline either.
FinCEN released a final rule on November 29, 2023 that amends the deadline for Reporting Companies created on or after January 1, 2024. Previously, for any Reporting Company created on or after January 1, 2024, the deadline was thirty (30) calendar days from creation.[iii] Now, there is a different deadline for Reporting Companies created January 1, 2024 – December 31, 2024 and Reporting Companies created on or after January 1, 2025. Reporting Companies created January 1, 2024 – December 21, 2024 now have ninety (90) days from creation to file.[iv] Reporting Companies created on or after January 1, 2025 have thirty (30) days from creation to file.[v]
FinCEN explained its change in the rules by stating that the extension for Reporting Companies created in this particular period of time will give the entity and its advisors the time necessary to understand the new reporting requirements and obtain the information necessary to file the BOI Report.[vi] However, according to FinCEN, this consideration does not extend to companies created on or after January 1, 2025 as it would result in a database full of inaccurate BOI Reports.[vii] The text of the CTA tasks FinCEN with collecting BOI Reports that reflect Reporting Companies at creation and ensuring that the database they are creating is highly useful.[viii] If Reporting Companies have an increased amount of time to file BOI Reports, the Reports do not reflect the information of the company at creation and the database is not useful to achieve the CTA’s purpose due to it not being reasonably up-to-date.[ix]
As a reminder, BOI Reports will need to be filed for all registered entities unless the entity qualifies for an exemption. Navigating the text of the new law may be overwhelming and you may find yourself in need of assistance before the arrival of compliance deadlines, especially since the deadlines have now changed. Contact Rosenacker Law Office for advice and assistance on your way to achieving compliance under the CTA.
[i] 31 CFR §1010.380(a)(1)(iii)
[ii] 31 CFR §1010.380(a)(2)(i)
[iii] 31 CFR §1010.380(a)(1)(ii)
[iv] 31 CFR §1010.380(a)(1)(i)(A)
[v] 31 CFR §1010.380(a)(1)(i)(B)
[vi] Treasury, FinCEN, Beneficial Ownership Reporting Deadline Extension for Reporting Companies Created or Registered in 2024, Final Rule, 88 FR 83500 (September 29, 2023).
[vii] Treasury, FinCEN, Beneficial Ownership Reporting Deadline Extension for Reporting Companies Created or Registered in 2024, Final Rule, 88 FR 83502 (September 29, 2023).
[viii] Id.
[ix] Id.