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New Requirements Loom For Business Owners And Officers

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The end of 2024 is in sight, but before you throw yourself into holiday plans, it is worth asking: Have you met your beneficial ownership information report filing requirement?

It may not be a festive question, but it is one that business owners and senior employees should consider before the year ends. If you know that you must make a BOIR filing but you still need to do it, consider this your reminder to get moving. And if you don’t know whether you need to make this report — or you aren’t even sure what the report is — keep reading.

Understanding BOIR Requirements


Since Jan. 1, 2024, many companies have reported information about their beneficial owners to the Financial Crimes Enforcement Network, or FinCEN, part of the U.S. Treasury Department. Congress created the requirement for these reports as part of the Corporate Transparency Act, which it passed in 2021. For most companies that existed prior to Jan. 1, 2024, the due date to complete the initial BOIR filing is Jan. 1, 2025.

As the law’s name suggests, the Corporate Transparency Act, and the reporting requirements it created, were designed to make it clear to the federal government who owns and controls various companies in the United States. Requiring beneficial ownership reports, the theory goes, will help to prevent bad actors from using business structures like limited liability companies and S corporations to commit fraud, money laundering and other illegal activities anonymously.

The law’s filing requirements apply to both “reporting companies” and “beneficial owners.” Reporting companies must file their own BOIRs, reporting the entity’s beneficial owners. Beneficial owners may file directly, or their companies may file information on their behalf.

First, let me define these terms. Reporting companies are U.S.-based business entities including limited partnerships, limited liability companies, corporations (regardless of whether they are S corporations or C corporations for tax purposes) and limited liability partnerships. Foreign companies may also count as reporting companies if they are registered to do business in any U.S. state or Native American tribal land. The Corporate Transparency Act directly exempts 23 types of business entities, a list that FinCEN provides on its website.

Beneficial owners fall broadly into two categories: any owners with a stake in the business of 25% or more, and any officers, partners or members who exert “substantial control” over the company’s affairs. This control may be direct or indirect. Some examples include senior officers such as a company’s president or CEO; a person with authority to appoint or remove certain senior officers; or important decision-makers who can shape the direction of a business. To be a beneficial owner, an individual only needs to fall into one of these categories, meaning some “owners” may not own any part of the company at all. As created, these categories leave the potential for gray areas, but generally it is wise to err on the side of caution.

This caution reflects the serious penalties that the Corporate Transparency Act sets out for failing to comply with beneficial ownership reporting requirements. Willful failure to report complete or up-to-date information about beneficial ownership can lead to civil penalties as high as $500 per day as long as the violation continues. It could also result in criminal penalties of up to two years in prison or a fine of up to $10,000. Legal accountability may extend to an entity’s senior officers for that entity’s failure to file.

How To Meet BOIR Requirements


Given the potential consequences for failing to file, businesses should make submitting a beneficial ownership information report in a timely manner a priority. Beneficial owners, too, should not simply trust their company is taking care of the necessary BOIRs. Make sure you know whether your company has submitted this report, and whether they have included you as a beneficial owner or whether you need to submit your own information.

If you are in charge of the BOIR filing for a reporting company, you have a few options. (Note that FinCEN does not require any particular person to handle the company’s filing; as long as the company authorizes the individual to submit, any appropriate person may handle it.) You can choose to file the report yourself online. FinCEN offers the options of filing out an online form or uploading a PDF. Companies may do either at this website. This method is perfectly appropriate for simple or straightforward situations. For example, if you are the sole owner of a single-member LLC, handling your own filing is likely a reasonable approach. FinCEN does not levy any filing fees, and the system will provide you with a confirmation once your report is received.

When completing the BOIR, it is worth noting that the report makes no distinction between those beneficial owners who meet the criteria based on ownership and those who fall under the control definitions, or individuals to whom both apply. The report just asks you to provide the information, described in the next section, for all people who fall into either category, without asking you to segregate or explain which criteria they meet.

Companies with larger or more complex structures may find it more practical to seek help with BOIR filings. For example, an entity with a complicated ownership structure may struggle to determine who must file reports as beneficial owners. If a business has minority owners, high-level managers without ownership stakes, or certain special situations (such as family business where some owners are minor children), seeking professional advice may save time and reduce uncertainty. FinCEN has suggested that professionals including lawyers, accountants and Internal Revenue Service Enrolled Agents may support businesses trying to comply with the new rules.

Whether you plan to file on your own or with help, you will need to gather the pertinent information. This includes (click graphic to enlarge):

BOIR filing requirements infographic (thumbnail).

Individuals or companies with a “FinCEN identifier” — a unique number that FinCEN issues upon request — may be able to use that identifier in place of some of the information listed above. Individuals can request a FinCEN identifier online. Companies may request one when submitting their initial BOIR filing, or when submitting an updated filing later, by checking a box as part of that form. Applying for a FinCEN identifier is most useful for beneficial owners who will appear on many entities’ BOIRs.

It is important to note that beneficial ownership information is a new FinCEN reporting requirement, but some financial institutions have long required this information from business clients. Bear in mind that companies that have already submitted beneficial information to their financial institution are not excused from BOIR filing requirements and will still need to submit these forms to FinCEN.

I mentioned the end of the year earlier in this article. Most reporting companies have until Jan. 1, 2025 to file beneficial ownership information. There are a few exceptions, however. Companies created or registered in 2024 must file BOIRs within 90 calendar days of receiving notice that the creation or registration was effective (whichever is earlier). After Jan. 1, 2025, this window will shrink to 30 days for new businesses.

As the first BOIR filing deadlines were rolled out this year for entities formed in 2024, life intervened — in the form of various natural disasters that made compliance more difficult for some filers. In late October FinCEN responded by granting six-month deadline extensions to certain businesses that were affected by Hurricanes Beryl, Debby, Francine, Helene and Milton. This relaxation mainly applied to entities whose principal place of business was in locations covered by prior Internal Revenue Service deadline relief and Federal Emergency Management Agency disaster declarations, although some other enterprises could also seek relief. Details were provided in five “alerts” published on the FinCEN website.

Once companies and individuals have filed beneficial ownership information, they will not need to re-file on an annual basis. Reporting companies and beneficial owners only need to file a report once, until any of the information the report includes must be updated or corrected. Going forward, companies should submit any updates or corrections within 30 days of the relevant change taking effect. Similarly, if a company or individual discovers any mistakes in a previously submitted BOIR, they must submit a new, corrected report within 30 days of becoming aware of the inaccuracy.

When a company or an individual does need to update a BOIR, they must file an entirely new report. In many cases, updates will be so infrequent that this requirement is not a burden, regardless of submission method. But companies that may need to update often — such as those with many beneficial owners, for example — may find it easier to work with a professional to handle these updates. They may also want to use the PDF upload method, since making changes on the local version of a PDF and uploading the revised file may be less time-consuming than filling in the online form each time changes are necessary.

Are BOIR Requirements Here To Stay?


The Corporate Transparency Act, like many major pieces of legislation, has earned both fans and detractors. Supporters tout the law’s focus on reducing fraud and other financial crime. Detractors cite privacy concerns, especially the provision that FinCEN may share BOIR information with a variety of other federal and state agencies under certain circumstances. (Note, however, that BOIR information is exempt from Freedom of Information Act requests.)

This legislation, and the reporting requirements it created, are still so new that it is difficult to say how they will affect either crime or privacy in the long term. But the question of its constitutionality has already started to make its way through lower courts.

At this writing, there are eight active legal challenges to the Corporate Transparency Act. Two have already progressed far enough to indicate that the lower courts are unlikely to agree when left to their own devices. In March 2024, the U.S. District Court for the Northern District of Alabama ruled the law unconstitutional in a suit brought by the National Small Business Association and one of its members. In September 2024, a U.S. District Judge for the District of Oregon issued an order upholding the constitutional nature of the legislation and denying the injunction that plaintiffs requested, finding that the plaintiffs failed to demonstrate a likelihood of success on the merits. With multiple lawsuits and contradictory findings already in play, and appeals to those initial decisions likely or underway, the future of the act remains unclear.

Ultimately, the U.S. Supreme Court may decide whether the Corporate Transparency Act stands or falls. Or new legislation by a future Congress could repeal the law before the current cases make it that far. Even if the law’s opponents eventually prevail in court, however, a journey to the Supreme Court will take years. It is certain that nothing will be decided before Jan. 1, 2025, the due date for most reporting companies. Whatever the future of BOIR filings, that particular deadline is one business owners can count on.

Whatever your opinion of the legislation that created them, business ownership information reports are not going away anytime soon. Given the potential penalties, businesses owners or officers who have delayed should take this opportunity to submit their forms and remove this item from their to-do list well before the ball drops in Times Square.

Vice President Eric Meeermann, who is based in our Stamford, Connecticut office, is among the authors of our firm’s recently updated book, The High Achiever’s Guide To Wealth. He contributed Chapter 8, "Buying A Home." He also contributed chapters to the firm’s book Looking Ahead: Life, Family, Wealth and Business After 55.