FinCEN, a part of the Treasury Department focusing on financial crimes, recently proposed a revision to the beneficial ownership information (BOI) reporting rule. The aim of this amendment is to provide an extended deadline for certain newly registered companies to file their initial BOI reports.
What's the Change? Initially, companies registered from January 1, 2024, were mandated to file their BOI reports within a month of being notified of their creation. However, the new proposal suggests giving these companies a three-month window if they are registered between January 1, 2024, and December 31, 2024. This extension aims to offer these entities a better chance to understand the fresh reporting requirements and gather the requisite data for the filing. From 2025 onwards, the original 30-day deadline would be reinstated.
Why the Change? In 2022, FinCEN introduced the Reporting Rule, effective from 2024, obligating specific corporations and similar bodies to submit details about their beneficial owners and those involved in their formation. The goal of this rule is to counter illicit activities like money laundering by offering law enforcement and regulators easier access to BOI.
However, after interacting with various stakeholders, including trade associations and non-profits, FinCEN felt the need to revise its stance. They recognized the challenges newly registered entities might face in understanding and adhering to this new regulation, especially as many would be interacting with FinCEN for the first time.
The extended deadline offers several benefits:
Lastly, while the proposed 90-day window is intended for both domestic and international entities registered in the U.S. in the first year post the Reporting Rule's implementation, entities registered from 2025 will follow the 30-day timeline. This is based on the belief that by then, the BOI reporting process will be more commonly understood among stakeholders.