Alabama Small Business Development Center Network
Deadline Suspended for Corporate Transparency Act (BOI / FINCEN Reporting)

Deadline Suspended for Corporate Transparency Act (BOI / FINCEN Reporting)

The Corporate Transparency Act (CTA), a bipartisan law passed by Congress in 2021 to curb illicit finance, required many companies doing business in the United States to report information about who ultimately owns or controls them to FinCEN (Financial Crimes Enforcement Network), which is part of the U.S. Treasury Department.  Small businesses previously required to report Beneficial Ownership Information to the Financial Crimes Enforcement Network (FinCEN) are not required to comply with reporting requirements because the constitutionality of the Corporate Transparency Act (CTA) is subject to ongoing litigation.

Alabama small businesses can download our FinCEN BOI quick-reference guide here.  Note: Reporting dates have not been updated on this document, but the registration process has not changed.

Update: December 27, 2024
The 5th Circuit Court has reinstated the nationwide injunction that was ordered by a US District Court in Texas at the beginning of December.  As a result, Main Street businesses are NOT required to comply with the Corporate Transparency Act’s Beneficial Ownership reporting requirements and are not subject to liability if they fail to do so while the order remains in force. The 5th Circuit panel will more fully consider the injunction and the underlying merits of the legal challenge on March 25, 2025.  In other words, covered entities do not need to file their Beneficial Ownership Information reports by the original or extended deadlines.From the Department of Treasury:
“In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
What now? What should you do?
It is important to note that the Alabama SBDC Network does not provide legal advice.  Small business owners need to understand that the preliminary injunction is once again in place; it does not mean that the CTA or its reporting requirements have definitively been found to be contrary to law or unconstitutional.  As of December 27th, 2024, the requirement to report has been suspended nationwide.

We suggest that companies gather the information needed to complete BOI reporting and encourage companies to continue to monitor the status of the CTA. To understand the series of court decisions related to the injunction in the final days of December 2024, please see details provided on FinCEN’s Beneficial Ownership Information Reporting website.
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Additional Helpful Resources for Businesses:

The new administration and congress may take any number of steps that will impact the reporting requirement:
– They could revise or repeal the original legislation
– They could limit the funding allocated to enforcing the penalties
– They could issue policy guidelines that might limit or change the circumstances under which the BOI information is collected
– The next Congress could repeal or amend the legislation

(Original post regarding FinCEN and BOI reporting is preserved below.)

Clients note that filing a BOI report is easy.

Most Alabama SBDC clients have reported that the BOI is a straightforward process. To file a Beneficial Ownership Information report, small business owners will need to provide information about the reporting company, beneficial owner and company applicant.  But if you have questions, your local SBDC Business Advisor would be glad to help.

This will include date of birth, the legal name of your business and Doing Business As name, address, jurisdiction of where the business was formed or registered, and the Tax Identification Number.

Who is a beneficial owner?

The CTA defines a beneficial owner as an individual who, directly or indirectly, exercises substantial control over a reporting company, or who owns or controls at least 25% of the ownership interests of a reporting company.

Is my small business a reporting company?

Reporting Companies fall under two categories: domestic reporting companies and foreign reporting companies. Both types of reporting companies must file a BOI report. Your small business may be a domestic reporting company if:

  • The business is a corporation, OR
  • The business is a limited liability company (LLC), OR
  • The business was created by the filing of a document with a secretary of state or any similar office under the law of a State or Indian Tribe.

Your small business may be a foreign reporting company if the business was registered to do business in any U.S. State or Tribal jurisdiction by filing a document with a secretary of state or similar office of the State or Tribe.

How do I know if I have to file a BOI report?

A key factor that will determine whether you have to file a Beneficial Ownership Information report is whether you had to file a document with your state’s secretary of state or a similar office to create your company. This also applies to foreign companies that register to do business in the United States.

Do I need to report company applicants?

Only businesses registered on or after January 1, 2024 are required to report their company applicants on the BOI report.  

There can be up to two individuals who qualify as company applicants. That includes the individual who first registered or created the reporting company, and the person who is primarily responsible for the filing of the document that creates or registers the company.

Do I qualify for an exemption?

Certain businesses qualify for an exemption to file a BOI report, including:

  • Securities reporting issuer
  • Governmental authority
  • Bank
  • Credit union
  • Depository institution holding company
  • Money services business
  • Broker or dealer in securities
  • Securities exchange or clearing agency
  • Other Exchange Act registered entity
  • Investment company or investment adviser
  • Venture capital fund adviser
  • Insurance company
  • State-licensed insurance producer
  • Commodity Exchange Act registered entity
  • Accounting firm
  • Public utility
  • Financial market utility
  • Pooled investment vehicle
  • Tax-exempt entity
  • Entity assisting a tax-exempt entity
  • Large operating company
  • Subsidiary of certain exempt entities
  • Inactive entity

When is the deadline to submit a BOI report?  *See updated deadlines above.

If your small business was created or registered before January 1, 2024, you have until January 1, 2025 to submit a Beneficial Ownership Information report. This gives you a year to get acquainted with the rule, get in touch with FinCEN with any questions you may have, and attend one of their upcoming educational events.

If your small business is created or registered between January 1, 2024 and January 1, 2025, you have 90 days to file a Beneficial Ownership Information report. Small businesses created after January 1, 2025 will have 30 days to file.

Who will have access to my information?

Beginning February 20, 2024, FinCEN will provide access to BOI reporting data in phases to authorized government agencies, financial institutions and foreign government agencies that meet the requirements of the Access Final Rule. FinCEN will begin working with such agencies and entities to ensure BOI data is protected by creating new mechanisms and standards to protect sensitive information. For more information about the Final Rule, click here.

Will FinCEN send me correspondence to file a BOI report?

No, the agency won’t be reaching out to small business owners via phone, text or email. FinCEN has been notified of an uptick in fraudulent activity, so please refrain from clicking on links or scanning QR codes within alleged correspondence from FinCEN.

FinCEN has developed a number of resources to help businesses comply with the new requirement, including a Small Entity Compliance Guide. You may also review their quick FAQ on Key Reporting Questions or get in contact directly with FinCEN.

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