As of February 17, 2025, the U.S. District Court for the Eastern District of Texas has ruled that the Corporate Transparency Act's (CTA) beneficial ownership information (BOI) reporting requirements are back in effect. The Department of the Treasury understands companies may need more time to meet these requirements and are giving most businesses an extra 30 days to file, extending the deadline to March 21, 2025.
What is the BOI?
The “Beneficial Ownership Information” (BOI) report includes details about individuals with substantial control over the company, like their names, addresses, and date of birth. A beneficial owner is someone who either has substantial control over a company or owns/controls 25% or more of its shares. Whether an individual has “substantial control” over a reporting company depends on the power they may exercise and can include simple things like regular shares of stock or more complicated arrangements.
Most corporations, limited liability companies (LLCs), and other similar entities formed or registered to do business in the United States must file beneficial ownership reports. For more information, the FinCEN BOI website has many resources, including a thorough FAQ section, instructions on filing, and other information.
What steps should I take next?
Please note that a bill introduced in the U.S. House last month, the Protect Small Businesses from Excessive Paperwork Act of 2025, seeks to push the reporting deadline further back to January 1, 2026, for companies formed before January 1, 2024. The bill passed the House unanimously with a 408-0 vote on February 10. It has since been sent to the Senate, where it was referred to the Committee on Banking, Housing, and Urban Affairs. To become law, the bill must pass through the committee, receive approval in a full Senate vote, and then be signed by the President. We will keep our clients updated on its status.
In the meantime, you should:
- Determine if your entity qualifies as a “reporting company” under the CTA and gather the most recent ownership and control information, keeping track of any changes.
- Collect identifying information for each “beneficial owner” under the CTA, and encourage them to obtain a FinCEN ID to simplify reporting; if they don’t, they must provide their full legal name, email, address, date of birth, and identification card image.
- Prepare to file your initial, updated, or corrected BOI reports by March 21, 2025, using FinCEN’s E-Filing system. Here is Mowery & Schoenfeld’s FinCEN Reporting Checklist, which should help assist in this process.
- Stay updated on federal litigation involving the CTA, as ongoing court challenges and potential Supreme Court review may affect your reporting requirements.
Given the complexities of this new regulatory landscape, we recommend consulting with legal counsel as soon as possible to ensure that your business is fully compliant with the Corporate Transparency Act. Legal professionals can provide tailored advice based on your specific circumstances and will assist you with the preparation of your company’s BOI Report.
Although we want to make sure you are aware of any updates and requirements, the filing of this will need to be completed outside of your Mowery & Schoenfeld relationship. If you are not currently engaged with an attorney to prepare your company’s initial BOI Report, please contact us so that we may connect you with the proper resource.