The U.S. Department of the Treasury has set a March 21, 2025, deadline for millions of businesses to report their beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN). Non-compliance could result in fines of up to $10,000 or more.
This requirement stems from the Corporate Transparency Act (CTA) of 2021, designed to combat illicit financial activities by mandating that corporations, limited liability companies (LLCs), and other similar entities disclose their true owners.
The CTA aims to prevent the misuse of anonymous shell companies for money laundering, fraud, and other illegal endeavors.
According to CNBC, The enforcement of the CTA has faced legal challenges. In January 2025, a federal judge in Texas issued an order staying FinCEN’s BOI reporting regulations, effectively pausing enforcement.
However, on February 18, 2025, the U.S. District Court for the Eastern District of Texas lifted this stay and reinstated the reporting requirements.
FinCEN extended the filing deadline to March 21, 2025, to provide businesses additional time to comply.
During this 30-day extension, FinCEN will evaluate options to adjust deadlines further and intends to initiate a process to revise the BOI reporting rule, aiming to reduce the burden on lower-risk entities, including many U.S. small businesses.
Businesses required to report must submit their BOI directly to FinCEN using the agency’s E-Filing system.
Failure to comply with the reporting requirements may result in civil penalties of up to $591 for each day the violation continues, with the amount adjusted annually for inflation, and criminal penalties of up to two years imprisonment and a fine of up to $10,000.
Certain entities are exempt from the reporting requirements, including publicly traded companies, nonprofits, and specific large operating companies.
Businesses are encouraged to review the criteria to determine their obligations under the CTA.
Businesses should visit FinCEN’s official BOI reporting page for more detailed information and to access the e-filing system.
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