Small Business Owners, Don’t Miss This Critical Filing Deadline in January 2025
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Attention small business owners! A new reporting rule under the Corporate Transparency Act (CTA) may affect your business. Starting January 1, 2024, most U.S. businesses must file a Beneficial Ownership Information (BOI) Report to the Financial Crimes Enforcement Network (FinCEN). More importantly, if your business qualifies and was created before January 1, 2024, you must file this report by January 1, 2025 to avoid major penalties.
Why It Matters
Failing to file on time may result in:
Daily penalty fees of $591 up to $10,000
Prison time of up to two years
Yikes!
So, here’s what you need to know to stay compliant.
What is the Corporate Transparency Act?
Enacted in 2021, the CTA is designed to combat tax fraud, money laundering, and terrorism financing by requiring certain businesses to report their ownership details. The goal is to increase transparency and accountability by collecting information about individuals who control or benefit from companies operating in the U.S.
What’s Needed to File?
Under the CTA, eligible businesses must submit a Beneficial Ownership Information (BOI) Report to FinCEN, which includes details about:
The entity itself
Beneficial Owners (Any Individual who owns or controls at least 25% of a company or who has substantial control over the company.)
Company Applicants (The person or business responsible for filing the original formation or registration documents with the state.) IMPORTANT: This section is only required if your business was formed on or after January 1, 2024.
Filing the report is straightforward, but you’ll need the following information for each individual:
Full Name
Address
Date of Birth
Copy of a Government-Issued ID (like a passport or driver’s license)
How do I file the BOI Report?
To ensure compliance:
Confirm that your business meets the criteria for filing a BOI report.
Gather the required information about your business, beneficial owners, and company applicants. This includes
Submit your report to FinCEN before the deadline.
You can do all of this by visiting FinCEN’s official website.
What’s the Deadline for My Business?
Businesses created before January 1, 2024:
File your initial BOI report by January 1, 2025.
Businesses created between January 1, 2024, and December 31, 2024:
File your initial BOI report within 90 calendar days after receiving notice that your company’s creation or registration is effective.
Businesses created on or after January 1, 2025:
File your BOI report within 30 calendar days of receiving notice of your company’s creation or registration.
The Good News
Once you’ve filed your BOI report, you’re done! Yippee! Unlike other compliance filings, the BOI report is not an annual requirement. You only need to update it if there are changes to the information provided.
This new requirement is an essential step in promoting transparency and fairness in business operations. Protect your business by staying informed and compliant.
Important Update
On December 3, a Texas court issued a temporary injunction blocking the enforcement of the Corporate Transparency Act and its January 1, 2025, filing deadline. The Treasury Department responded by appealing the decision, and on December 23, 2024, the injunction was lifted. Consequently, FinCEN issued new deadlines for the BOI report filing. You can view the new deadlines here.
