The requirement for FinCEN Beneficial Ownership Information reports (FinCEN BOIR) under the Corporate Transparency Act (CTA) took effect on January 1, 2024. This is broadly recognized for forestalling illegal activities and money laundry avoidance and other criminal operations through expanded corporate ownership transparency. Based on a federal court's decision on February 18, 2025, the injunction which halted the CTA has been removed. FinCEN BOIR compliance is required again, and the new deadline is March 21, 2025.
This article will bring you through a comprehensive compliance roadmap and critical descriptions for organizations seeking FinCEN BOIR high-level requirements.
Recent Legal Developments Affecting BOI Reporting
Financial Crimes Enforcement Network (FinCEN) BOIR compliance is currently on hold due to ongoing litigation. Below is a timeline of significant legal actions:
- Dec. 3, 2024: A Texas federal court issued a nationwide preliminary injunction on CTA enforcement (Texas Top COP Shop, Inc. v. Merrick Garland).
- Dec. 23, 2024: The Fifth Circuit granted the DOJ’s motion for a stay on the injunction, extending the compliance deadline from Jan. 1 to Jan. 13, 2025.
- Dec. 26, 2024: The Fifth Circuit vacated the stay, reinstating the injunction. FinCEN BOIR requirements are paused until constitutional oral arguments on the CTA in March 2025.
- Jan. 23, 2025: The U.S. Supreme Court lifted the injunction.
- Jan. 24, 2025: FinCEN notified businesses that due to a separate Texas case that issued a separate nationwide injunction on Jan. 7, 2025, FinCEN BOIR filings are not currently required.
- Feb. 18, 2025: U.S. District Court for the Eastern District of Texas lifted the injunction (Smith, et al. v. U.S. Department of the Treasury). FinCEN BOIR is required again. The new deadline is March 21, 2025.
Businesses should prepare and file FinCEN BOIR as soon as possible as the deadline is quickly approaching. Although FinCEN indicated that it may further extend the deadline, further extension is not certain. FinCEN Notice, FIN-2025-CTA1, 2/18/2025
Compliance Implications
Failure to comply by the deadline could result in harsh fines once the Corporate Transparency Act's enforcement resumes.
Civil Penalties
Businesses that fail to file the FinCEN Beneficial Ownership Information Report (FinCEN BOIR) or submit incorrect details can incur daily civil penalties of $591 per day per entity.
Criminal Penalties
Willful non-compliance, including providing false or misleading information, can lead to criminal fines of up to $10,000 and/or up to 2 years in jail for individuals who are either owners or have substantial control of the reporting entities.
Beyond monetary fines and criminal penalties, noncompliance will attract legal consequences, such as the threat of lawsuits and regulatory investigation. There might also be reputational damage, particularly for companies seen to be trying to avoid transparency regulations.
Businesses should stay prepared by gathering necessary documentation, ensuring accuracy, and completing the FinCEN BOIR as soon as possible. Being proactive will help avoid penalties and ensure compliance.
What is FinCEN BOI Reporting (FinCEN BOIR)?
FinCEN Beneficial Ownership Information Reporting (BOIR) is the requirement of businesses to report information of each of their entities formed or registered in any states within the U.S. and each of these entities’ beneficial owners. The beneficial owners are ultimate individuals who either own or manage or have substantial control of each entity. There are 23 exemptions which need to be analyzed whether can apply to certain entities. If an entity meets all of the criteria of one of the exemptions, such entity is “exempted” from FinCEN BOIR - i.e., no need to file FinCEN BOIR for such entity.
Information required to be reported for each reporting entity includes the legal name, formation date and jurisdiction, and address. For entities formed after January 2024, they must also report who are the company applicants. These are individuals who either ordered to form the reporting entity and/or actually formed the reporting entity.
For each beneficial owner and company applicant, the reporting entities must file: the individual’s name, birthdate, address, the identification issuance information and number, and a copy of the identification such as passport or driver’s license.
In the community property states, the information of each beneficial owner’s spouse or legal partner will also need to be filed.
The key to FinCEN BOIR compliance is the legal analysis as to who is the actual beneficial owner(s) of each reporting entity. It is not a guessing game. It needs to be based on the entities’ legal documents.
What entities must be filed for FinCEN BOIR?
Entities required to file FinCEN BOIR include those that are formed or registered in any of the states within the U.S. Below are some examples of the types of entities that must comply:
- Corporations - see exemptions below
- Limited Liability Companies (LLCs) - see exemptions below
- Partnerships: General partnerships, limited partnerships (LPs), and limited liability partnerships (LLPs)
- Foreign Entities Registered in the U.S.: Foreign entities generally are not required to file FinCEN BOIR, but if such entities are registered in any states within the U.S., even if based abroad, must complete FinCEN BOIR.
- Nonprofits: Many people do not know that their non-profit entities will also need to complete FinCEN BOIR. This includes homeowner associations and some of their non-profit organizations. There are exemptions for non-profits, but legal analysis must be completed to ensure that the exemptions actually apply to certain non-profit entities
Although trusts themselves are not required to complete FinCEN BOIR, if any trusts have more than 25% ownership interests of any reporting entities and/or have control over any of the reporting entities, some of the individuals within the trusts may need to be reported as beneficial owners for such reporting entities. These individuals include trustees, grantors, beneficiaries, protectors, and other controlling individuals. Which of these individuals needs to be reported would depend on the type of trust and their roles.
Exemptions
There are 23 exemptions under the CTA, and any entities that can meet all criteria under any of these exemptions are not required to file a FinCEN BOIR.
Keep in mind that just because one entity is exempted, it does not automatically trigger exemption to all of its subsidiaries or affiliates. In fact, most entities owned by real estate companies do not qualify for exemptions and would need to file FinCEN BOIR.
Legal analysis of exemption for FinCEN BOIR is complicated. Analysis should be done by lawyers. Not any lawyers, but lawyers who have studied the CTA.
Deadlines for Completing FinCEN BOIR
New deadlines for filing were:
- Entities formed before 2024: File an initial BOI report by March 21, 2025.
- Entities formed in 2024: Entities or reporting companies created in 2024 must file by March 21, 2025.
- Entities formed after Jan. 1, 2025: Entities or domestic reporting company filings must be submitted within 30 days of formation.
Failure to meet these deadlines could result in civil and criminal penalties, making timely compliance essential.
FinCEN BOIR Compliance Checklist
To ensure compliance with the Corporate Transparency Act (CTA) and avoid penalties, follow these streamlined steps for filing your FinCEN BOIR. For each entity, you need to do the following:
- Gather Required Documentation:
- Entity formation documents (e.g., Articles of Incorporation for corporations, Articles of Organization or similar documents for LLCs).
- Ownership agreements (e.g., bylaws, operating agreements, or partnership agreements, as applicable) describing the management and ownership structure.
- Consents / Resolutions
- Amendments.
These documents should have all the information that you need to report basic information for the entity and analyze who are its beneficial owners.
- Analyze Exemptions:
Analyze if your entity meets all of the criteria for any of the 23 exemptions under the CTA. Consult lawyers who have studied the CTA.
If the entity is not exempted, please proceed to the next step:
- Review the Documents above and identify:
- Who are the managers/directors?
- Who are the officers?
- Who owns 25% or more of ownership percentages of the entity?
- Who are the individuals have substantial control of the entity?
- Identify Beneficial Owners:
The individuals that you identified in #2 above are the beneficial owners who you need to report for the entity. - Gather Beneficial Owners’ information and identifications
- Get a copy of each beneficial owner’s identification
- Make sure you have each beneficial owner’s legal name, address, birthdate, identification number, and a copy of his/her identification to file
- Verify Accuracy:
Ensure all information that you will be reporting to FinCEN BOIR matches the legal documents and the individuals’ personal identifications. - File on Time:
File FinCEN BOIR by March 21, 2025 (unless you fall under any later deadline based on disaster relief extension). You can file for free of charge on FinCEN website directly. You can also utilize services like SeedJura.CO (see below). You should choose third-party service providers wisely as many online service providers do not provide the total solutions that you need for FinCEN BOIR.
Common Mistakes to Avoid
- DO NOT Guess: Information reported to FinCEN, especially identifying the beneficial owners, must be based on legal documents. Unless there is only one individual who owns 100% of the entity and there is no manager or officer named in your legal documents, you may likely have left out other individuals who are on your legal documents that you should have reported as beneficial owners. Don’t guess.
- DO NOT do it yourself with a complex ownership structure: If any of the owners of your entity is an entity or a trust, you probably have a complex ownership structure. This will take legal analysis to identify each layer of the ownership structure to identify: (i) who the entity or company's beneficial owners are, including those who exercise substantial control. You should consult with lawyers who have studied the CTA to assist with the legal analysis.
Finding Legal Expertise for FinCEN BOIR Compliance
While some businesses might consider filing FinCEN BOIR on their own, it’s highly recommended to consult legal professionals. A lawyer who has studied the CTA can ensure that beneficial owners are correctly identified and that the filings comply with all legal requirements. Mistakes in reporting can lead to significant civil and criminal penalties.
Why Work with a Lawyer?
- Legal professionals ensure the accurate determination of beneficial owners and company applicants.
- Mistakes in reporting can lead to civil and criminal penalties.
Most third-party FinCEN BOIR online services only assist with the filings and NOT in legal analysis. This is because these vendors are not lawyers. Paying a third party to only complete the action of "filing" when filing is free of charge on FinCEN is wasting your money. You should only pay for services that include legal analysis and determine who are the beneficial owners to be reported.
SeedJura.CO: A Legal Tech Solution for FinCEN BOIR (with legal analysis)
With SeedJura.CO which is built and backed by lawyers, the tech platform will automatically conduct legal analysis and determine the beneficial owners for each entity and then will file relevant information based on the CTA’s requirements directly with FinCEN with a click of the button.
SeedJura.CO is offered by SeedJura, PLLC, our law firm, so our law firm is responsible for the accuracy of the legal analysis and filing. Of course, the accuracy of information is totally depending on the accuracy of the basic information provided by businesses.
SeedJura.CO Pricing:
- One-time sign-up fee for just $10 when you sign up - including (1) preparing your entities, (2) determining beneficial owners, and (3) getting all information ready to be filed at any time.
- SeedJura FinCEN BOIR Services Fee is only $89.99 per entity (your first entity is free of charge) - only pay when you click on File.
Note that there are still court hearings being scheduled to determine the constitutionality of the CTA in April 2025. If the CTA is “canceled” by the U.S. Supreme Court or the federal government this year, you will get a refund of your payments minus any third-party processing fees (e.g., PayPal fees).
Final Thoughts
Corporate Transparency Act requires completion of the FinCEN BOIR. The injunction which halted the enforcement of the CTA has been removed by the most recent federal court case on February 18, 2025. Businesses are once again required to complete FinCEN BOIR. The new deadline is March 21, 2025 Making sure your FinCEN BOIR is accurate and submitted on time will be essential to avoid penalties on individual owners, officers, and managers.
Prepare ahead of time and address compliance proactively. With SeedJura.CO, your FinCEN BOIR can be done easily. SeedJura.CO, built and backed by lawyers, includes (i) legal analysis of the CTA to determine the beneficial owners and (ii) filing required information with FinCEN directly via the all-in-one legal tech platform. It is an affordable and flexible solution. Only pay when you file (with just upfront $10 sign-up fee).
Ready to make your FinCEN BOIR hassle-free? Get started today with SeedJura.CO and let us handle the legal complexities for you.
.png)
