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People take pictures of the US Treasury in Washington, DC, on Feb. 6, 2025.
Mandel Ngan | AFP | Getty Images
The Treasury Department has announced a new deadline of March 21 for numerous businesses to meet a reporting requirement regarding “beneficial ownership information.”
This requirement stems from the Corporate Transparency Act, enacted by Congress in 2021, which mandates that small businesses disclose the identities of individuals who own or have control over the company, whether directly or indirectly. The goal is to thwart criminal activities that exploit shell companies and obscure ownership frameworks, according to Treasury officials.
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Businesses have experienced challenges due to fluctuating deadlines for the submission of beneficial ownership information (BOI) reports. A series of court rulings had initially blocked the Treasury from enforcing this requirement until recently when those decisions were overturned.
On February 18, the U.S. District Court for the Eastern District of Texas lifted a nationwide injunction that had previously inhibited the Financial Crimes Enforcement Network (FinCEN), a bureau of the Treasury, from implementing the provisions of the Corporate Transparency Act.
Room for more delays?
This reporting requirement is estimated to impact around 32.6 million businesses, including certain types of corporations and limited liability companies, as per federal estimates.
Failure to meet the reporting criteria may expose businesses and their owners to civil fines that could reach up to $591 per day, adjusted for inflation. Additionally, non-compliance can lead to criminal penalties that include fines of up to $10,000 and potential imprisonment for up to two years.
Despite the extension of the previous deadline by 30 days, FinCEN has left the door open for possible further delays. “FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided,” the agency stated in a notice on February 18.
Moreover, FinCEN indicated that it would focus its enforcement efforts on businesses deemed to pose the greatest national security risks.
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