For LLCs and Corporations: Court Injunction—File Your FinCEN BOI Report Now or Wait?

Many owners of LLCs or small corporations are still not aware of the following filing requirement created by Congress in 2021 that had the support of both President Trump and incoming President Biden. 

Here’s an update on the Corporate Transparency Act (CTA) and its beneficial ownership information (BOI) reporting requirements. The Act’s intention is to root out bad actors and terrorists who own LLCs and corporations. Recent legal developments have created uncertainty around filing deadlines, and it’s important to understand your options and responsibilities.

Background on the CTA

The CTA requires many smaller corporations and LLCs to file a BOI report with FinCEN, identifying and providing contact information for the individuals who own or control the entity. This report is used solely for law enforcement purposes and is not made public.

Initially, businesses in existence before 2024 were required to file by January 1, 2025, while new businesses formed in 2024 had a 90-day filing deadline. However, recent court rulings have disrupted these deadlines.

Penalties for Non-compliance

Failure to file on time, when court injunction is lifted, can result in significant penalties, including fines of $591 per day, a potential $10,000 criminal penalty, and up to two years in prison.

Current Status

As of January 1, 2025, a nationwide injunction is in place, delaying all BOI filing requirements. While the injunction is active, you are not required to file a BOI report, and no penalties apply for non-filing. The injunction impacts the following entities:

• Businesses formed before 2024 with a January 1, 2025, deadline
• New businesses formed in 2024 with a 90-day filing deadline
• Businesses with changes requiring updates to previously filed reports

Voluntary Filing Option

Although filing is not currently required, you may file voluntarily. This can simplify compliance by avoiding last-minute deadlines if the injunction is lifted. Should the injunction end, deadlines may resume with little notice, so being prepared is essential. 

Go to FinCEN.gov/BOI to file your report. It takes about 10 minutes to complete. You will need the legal name of your entity, its tax ID number (EIN), and a digital scan or photo of the front of each owner’s drivers license. There is a short video, a guide and Q & A to help answer your questions on the BOI website.

Takeaways

While the CTA remains under judicial review, you are not obligated to file your BOI report. But it may be prudent to prepare now by gathering the necessary information. If you have already filed, no further action is needed unless there are reportable changes. 

Recommendation

Penalties for non-compliance are fierce. Consider filing the BOI report now. Be aware that if there are changes to owners, addresses and driver’s licenses, the BOI report must be updated within 30 days.

Peter VanderWoude, CPA
Equus Advisors
McNeil Bldg., 17 Main St., Ste 411, Cortland, NY 13045 | 607-756-5691
Center Ithaca, 171 E. State St., Ste M03, Ithaca, NY 14850 | 607-275-5700
www.EquusCPA.com