This post breaks down where we stand as of March 3rd 2025, and how the ever changing requirements affect your business. We’ll also offer practical tips on how to maintain proper internal documentation moving forward, now that the BOI filing requirements are evolving.
Corporate Transparency Act: A Brief Overview
The Corporate Transparency Act (CTA) was enacted to curb money laundering, terrorist financing, and other financial crimes by increasing transparency around business ownership. The CTA requires most businesses, including corporations and limited liability companies (LLCs), to file a Beneficial Ownership Information (BOI) report detailing the individuals who ultimately control or own the company.
The original deadlines and requirements for this reporting were complex and, at times, unclear. The laws were subject to numerous delays and reversals, all of which continue to change week by week (or so it seems).
What Changed?
On March 2, 2025, the U.S. Treasury issued a press release stating they will “not enforce any penalties or fines associated with the beneficial ownership information reporting” and further added they will seek to issue proposed rules to narrow the breadth of the act to only foreign reporting companies. While this is a welcomed win for many, the key facts to consider is that the reporting requirement is not gone, but rather the penalties, fines, etc will not be enforced. Thus, a business may still be in violation of current laws, but without any real enforcement. This could make a big difference for those companies undergoing mergers/acquisitions or even simply acquiring debt. Until the law definitively states businesses are no longer required to report, a company can be seen as breaking the law by failing to do so by the deadlines. Lets take a closer look at what those requirements are and how they have changed in such a short period of time:
As of February 2025, FinCEN (Financial Crimes Enforcement Network) announced a suspension of fines and penalties for failing to file BOI reports while they wait for further guidance and possible adjustments to the law. However, businesses are still required to comply with the new rules, and here’s how it affects you:
1. Deadline Extensions and Modifications
Initially set to go into effect on January 1, 2024, businesses were required to file their BOI reports by January 1, 2025. Following legal challenges, FinCEN extended deadlines and announced that no enforcement actions would be taken for failing to meet the current filing deadlines. Despite the uncertainty, it’s wise for business owners to proceed with preparing their filings in anticipation of the next enforcement period.
2. Who Must File?
The reporting requirement applies to most companies, including LLCs, corporations, and certain other entities that were formed by filing documents with a Secretary of State or similar office. However, businesses that meet the following criteria are exempt from filing:
- Businesses with more than 20 full-time employees
- Businesses with annual gross receipts over $5 million
- Entities that are already heavily regulated (e.g., banks, large operating companies, etc.)
3. What Information is Required?
The BOI report requires the identification of individuals who have substantial control or own at least 25% of a company. This information includes the individual’s name, date of birth, address, and unique identifier (such as a passport number or driver’s license).
BOI Filing Tips for Small Business Owners
Here’s what you should do to ensure compliance and maintain proper documentation going forward:
- Stay Informed: While there are still many uncertainties about BOI filing deadlines, it’s critical to stay updated on any legislative changes. You don’t want to be caught off guard when the regulations finally go into effect.
- Update Your Business Records: Ensure that all ownership and control details are accurate and updated in your business records. This will make filing your BOI report easier when it’s time.
- Work with Your CPA: The complexity of the BOI reporting requirements means that it’s often a good idea to work with a trusted CPA to ensure the correct information is submitted.
- Prepare for Potential Changes: Given that the law is still evolving, make sure to track the status of BOI reporting and be ready to adjust your filings accordingly. Pay attention to any new interim final rules that FinCEN may introduce in the near future.
The Future of BOI Reporting
It’s clear that the fight over the Corporate Transparency Act is far from over. While many of the rules are currently in flux, there is broad bipartisan support for making corporate ownership information more transparent.
Changes may come as Congress looks to modify the CTA, especially in terms of which businesses must comply with the BOI filing requirements and the deadlines for doing so. For now, small business owners should stay proactive in maintaining proper records and be prepared for further changes down the line.
As a small business owner, navigating these new reporting requirements can be overwhelming, but we’re here to help. If you have questions or need assistance filing your BOI report, schedule a free consultation today!