All Businesses Created in the U.S. Are Exempt From FinCEN's Beneficial Ownership Information Reporting

With the release of its interim final rule on March 21, 2025, the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) waived the reporting requirement for beneficial ownership information (BOI) on any business created in the United States, which includes those labeled as domestic reporting companies, and for all beneficial owners.

Foreign companies in operation as of March 26 still must file a BOI report, but have been given until April 25, 2025, to comply.

The following is a summary of decisions of this ongoing litigation since early December.

Feb. 18, 2025: BOI reporting requirements were brought back for most businesses by a federal district court decision. The decision by the U.S. District Court for the Eastern District of Texas granted the government’s request to temporarily lift the national injunction that paused BOI reporting requirements and enforcement.

FinCEN extended the deadline to file an initial, updated, or corrected report to March 21, 2025. Businesses that were given reporting deadlines that go beyond March 21 for extenuating circumstances (e.g., disaster relief extensions) should follow the later deadline.

Jan. 23, 2025: A decision by the U.S. Supreme Court to stay the nationwide injunction issued by a federal court in Texas never took effect because another federal court in Texas also had issued a nationwide injunction and since the appeal to the Supreme Court did not include the other Texas court's decision, the nationwide injunction remained in place.

Dec. 26: In a three-day span, BOI reporting requirements were on again, off again based on differing panel decisions from the U.S. Court of Appeals for the Fifth Circuit. In the end, the original deadlines and the extended ones the U.S. Treasury put in place after the government's appeal was granted were again no longer in effect because of a temporary halt.

Dec. 23: The Fifth Circuit grants an Emergency Motion for Stay pending appeal that reinstates BOI reporting requirements. With about 32 million businesses expected to be impacted, the Treasury Department announces an extension of deadlines for reporting to the Financial Crimes Enforcement Network (FinCEN). Again, these deadlines currently are not in effect.

• Reporting companies created or registered prior to Jan. 1, 2024, have until Jan. 13, 2025.
• Reporting companies created or registered in the U.S. on or after Sept. 4, 2024, that had the deadline between Dec. 3 and Dec. 23, 2024, have until Jan. 13, 2025.
• Reporting companies created or registered in the U.S. on or after Dec. 3, 2024 and on or before Dec. 23, 2024, have an additional 21 days from their original filing deadline to file.
• Reporting companies created or registered in the U.S. on or after Jan. 1, 2025, have 30 days to file after receiving actual or public notice that their creation or registration is effective.

At the present time, none of this action from the Fifth Circuit impacts the members of the National Small Business Association (if a member as of March 1, 2024) nor the original plaintiffs in National Small Business United v. Yellen, who do not have to report their BOI at this time.

Dec. 17: The Fifth Circuit denies a motion brought by the U.S. Department of Justice to stay the preliminary injunction.

Dec. 3: A federal district court in Texas issues an injunction that temporarily blocks enforcement of the CTA and its reporting rule.

The final outcome of this case remains uncertain, so individuals that could be subject to BOI reporting based on future court decisions should stay up to date on legal proceedings that could impact compliance requirements, especially if some of the previously proposed deadlines are reinstated.

Original article

The Corporate Transparency Act (CTA) originally required additional reporting requirements from businesses identified as reporting companies — primarily LLCs, S corporations, and C corporations. This mandate from FinCEN was intended to help prevent and combat money laundering activities by requiring some businesses to file a BOI report.

Who Qualifies as a Beneficial Owner?

There are a few factors used in determining a beneficial owner, including an individual who, indirectly or directly:

• Exercises substantial control over a reporting company
• Owns or controls 25% or more of a reporting company’s ownership interests

There are two types of reporting companies; a Domestic reporting company (DRC) and a Foreign reporting company (FRC). Both involve corporations and limited liability companies. Both must file a document with a secretary of state or similar office. The difference is a DRC is created through the filing of its documents, while an FRC is formed under the law of a foreign company and has to file documents to register to conduct business in the U.S.

Based on the interim rule released by the U.S. Treasury, all U.S. businesses and beneficial owners in those businesses are exempt from any BOI reporting requirements.

How Does My Business File a BOI Report?

Foreign reporting companies can file electronically and the form to report BOI can be accessed online.

What Information Is Required on a BOI Report?

A reporting company must report:

• Legal name
• Any trade names, DBAs, or trading as names
• Current street address of its principal place of business
• Its jurisdiction of formation or registration
• Taxpayer ID#

Beneficial owners must report:

• Individual’s name
• Date of birth
• Residential address
• An ID# from an acceptable ID document (passport, U.S. driver’s license, and name of issuing state or jurisdiction of the ID document
• Must supply an image of the ID document and it cannot be expired

For additional information, check out the BOI webpage.