Businesses formed before 2024 that are required to file Beneficial Ownership Information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN) must meet the December 31 deadline. While a recent federal court decision in Arkansas has caused some confusion regarding penalties for National Small Business Association (NSBA) members, all non-NSBA businesses subject to the Corporate Transparency Act (CTA) must still file by the end of the year.
Who Must File?
The CTA mandates that most entities formed by registering with a Secretary of State, such as C Corporations, S Corporations, and Limited Liability Companies (LLCs), must file BOI reports. Foreign companies registered to conduct business in the U.S. must also file.
Certain organizations, like large companies, banks, securities dealers, brokers, insurance companies, and inactive entities, are exempt. Most 501(c) nonprofits are not required to file, but other nonprofit types may still need to comply.
Helpful Links from FinCEN
Who Is a Beneficial Owner?
A beneficial owner is an individual who:
- Exercises substantial control over the reporting company, or
- Owns or controls at least 25% of the company.
These individuals must be named in BOI reports to ensure transparency and compliance with FinCEN regulations.
Penalties for Non-Filers
Failing to meet BOI reporting requirements can lead to severe penalties, including a civil fine of up to $591 per day. Willful violations may also result in criminal penalties, such as up to two years in prison and fines of up to $10,000.
Don’t Wait
Businesses formed in 2024 had 90 days to file their initial reports. Starting in 2025, new businesses will only have 30 days to comply. If your business is required to file, act now to avoid penalties.
