Guidance for Filing the 2023 Update of FinCEN's Report on Beneficial Ownership Information
The Financial Crimes Enforcement Network (FinCEN), a part of the US Department of the Treasury, has issued a new rule aimed at helping small businesses comply with the Beneficial Ownership Information (BOI) reporting requirements. These requirements were first published in September 2022 and will come into effect on January 1, 2024.
Who Needs to Report
Under the rule, entities formed or registered to do business in the U.S., with 25% or more ownership or substantial control, must identify and submit details of their beneficial owners. The required details include full legal name, date of birth, residential address, and an identification document.
Initial Filing Deadlines
Entities formed before January 1, 2024, must file by January 1, 2025. Entities formed in 2024 had 90 days from formation to file. Entities formed after January 1, 2025, must file within 30 days of formation.
Ongoing Requirements
Changes in ownership or company information must be reported within 30 days. Annual verification filings are due by December 31 each year.
Penalties for Noncompliance
Civil fines can reach up to $591 per day (inflation-adjusted), and criminal penalties include fines up to $10,000 plus up to two years imprisonment for willful violations.
Implementation Timeline and Recent Changes
The initial enforcement deadline was January 1, 2025, but following legal challenges, FinCEN announced on February 19, 2025, that BOI reporting requirements were reinstated with a new compliance deadline of March 21, 2025. Enforcement (including penalties) has been suspended pending imminent revisions to the rules, expected to reduce burdens on lower-risk entities, especially small businesses.
Proposed rule changes seek to limit BOI reporting obligations to foreign-owned entities, exempting many domestic businesses from filing requirements moving forward. Because of ongoing litigation and regulatory adjustments, some businesses are currently not required to submit BOI reports, or such filings remain voluntary until new rules are finalized and implemented.
Types of Reporting Companies
FinCEN distinguishes two types of reporting companies: domestic and foreign. A "company applicant" is the individual who files documents to create a US entity or, for foreign companies, who first registers the entity to do business in the U.S.
Resources for Small Businesses
To help businesses understand and comply with the new rules, FinCEN has published a set of educational materials, including a FAQ sheet, key filing dates, key questions, an introductory video, and an informational video. Subscribing to a newsletter can provide updates on regulations all over the world.
Next Steps
The current reporting rule is the first step taken by FinCEN to provide a more comprehensive legal framework. The next steps include introducing the Access Rule and new rules on Customer Due Diligence (CDD) checks. The term "Beneficial Owner" refers to a person who exercises substantial control over a company or owns or controls at least 25% of a company. FinCEN oversees sectors such as crypto and fintech to safeguard the financial system from crimes like money laundering and terrorism financing.
[1] FinCEN (2023). Beneficial Ownership Information Reporting Requirements under the Corporate Transparency Act. Retrieved from https://www.fincen.gov/resources/statutes-regulations/guidance/2023-03-24/beneficial-ownership-information-reporting-requirements-under
[2] FinCEN (2022). Beneficial Ownership Reporting Requirements under the Corporate Transparency Act. Retrieved from https://www.fincen.gov/news/news-releases/fincen-issues-final-rule-beneficial-ownership-reporting-requirements-under
[3] FinCEN (2025). Temporary Enforcement Notice Regarding Beneficial Ownership Information Reporting Requirements. Retrieved from https://www.fincen.gov/news/news-releases/temporary-enforcement-notice-regarding-beneficial-ownership-information-reporting
[4] FinCEN (2023). Proposed Rule: Beneficial Ownership Information Reporting Requirements under the Corporate Transparency Act. Retrieved from https://www.federalregister.gov/d/2023-05495/preamble/2023-04-27
- The new rule issued by FinCEN, a part of the US Department of the Treasury, mandates that small businesses with 25% or more ownership or substantial control must report their beneficial owners, including details such as full legal name, date of birth, residential address, and an identification document, under the policy-and-legislation aimed at combating financial crimes.
- Businesses, particularly small ones, should be aware that changes in ownership or company information must be reported within 30 days and annual verification filings are due by December 31 each year, as part of the general-news and politics surrounding the enforcement of Beneficial Ownership Information (BOI) reporting requirements.
