By: Thomas J. Inserra, CEO of Integro Bank
December 5, 2024
It is alarming that most small business owners are unaware of a rapidly approaching deadline for a new mandatory federal law that could impose fines of $591 per day.
Small business owners need to be aware that there is a new federal law known as the Corporate Transparency Act that requires the filing of a “Beneficial Ownership Information (BOI)” form, which must be filed by January 1, 2025. All businesses that fail to file the form may be subject to a $591 per day fine.
A temporary injunction has taken place which may extend the deadline, but that injunction could be lifted by a higher court and thus small businesses should still complete this filing by year end to protect themselves against possible fines.
Federal court blocks enforcement of beneficial ownership reporting rule
Less than a month before a Jan. 1 deadline for businesses to report their beneficial owners to the Financial Crimes Enforcement Network, a federal judge in Texas has issued a preliminary injunction blocking enforcement of the requirement. The order states that covered companies nationwide do not need to comply with the Jan. 1 reporting deadline, unless the judge or a higher court reverses the order in the meantime. Read more about the injunction from the ABA Banking Journal.
It is important to note that company entities that filed at the Secretary of State’s office (LLC’s and corporations) are required to file. That likely means even if you filed an LLC to purchase or own real property, that business is still required to file. If unsure, please consult an attorney.
To file your BOI there is an online form at: https://www.fincen.gov/boi
I took the time to file an online BOI report for two LLC’s and was able to complete the information in under 5 minutes. You will need to know the official company names, the Tax ID numbers, the names and date of birth of the principal owners and have forms of ID saved to your computer to complete the form.
Allocating 5 minutes of your time to make this filing and avoid fines of $591 per day is worth the investment.
The U.S. Chamber of Commerce issued an explanatory article about the process here: https://www.uschamber.com/co/start/strategy/how-to-file-beneficial-ownership-report