We know it is confusing.
Just days before the deadline to report the Beneficial Ownership Information Report (BOI), new legal actions at the federal level put the compliance date on hold.
Indefinitely.
But BOI is NOT dead.
We know you read our blogs, so you remember the BOI report affects around 32 million LLCs nationwide and millions of business owners in the USA and overseas.
One of the last legal maneuvers of 2024 regarding the fight to report BOI happened on December 31, when the Department of Justice (DOJ), on behalf of the U.S. Treasury and the Financial Crimes Enforcement Network (FinCEN), applied to the Supreme Court of the United States to stay the nationwide injunction imposed by the Fifth Circuit Court of Appeals on December 26, 2024.
This injunction suspended the enforcement of BOI’s reporting requirements under the Corporate Transparency Act of 2020 (CTA).
What is BOI? Understanding BOI and The Corporate Transparency Act
In essence, BOI is a database of LLCs and their owners created by Congress under the Corporate Transparency Act, a bipartisan law.
Congress signed the Corporate Transparency Act, or CTA, into law in January 2021. CTA aims to enhance corporate transparency and combat illicit financial activities like money laundering, tax evasion, and terrorism financing. The Act introduces new regulations mandating companies to disclose their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). FinCEN is the top financial intelligence unit under the United States Department of the Treasury and is dedicated to combatting financial crimes within the USA.
This mandate includes substantial penalties for LLC owners who do not comply, including significant fines and jail time.
What Is Beneficial Ownership?
Beneficial ownership refers to the individuals who ultimately own or control a company, even if their names aren’t on legal formation documents. That includes owners, certain relatives, managers, employees, or even lawyers if they exercise more than 25 percent control of the legal entity (LLC or others).
The CTA’s initial mandate was that all LLCs report their Beneficial Owners by December 31st, 2024.
Several business groups rejected the mandate and filed lawsuits against the federal government.
After a court in Texas attempted to stop the BOI mandate, an appeals court reinstated the law, changing the deadline to January 13th, 2025. However, the mandate was stopped again indefinitely in December 2024.
Now, the Treasury Department and FinCEN are asking the United States Supreme Court to intervene.
BOI: Attorney Marcos’ Recommendation
Attorney Marcos E. Garciaacosta has been following the developments of the BOI report carefully and has always recommended business owners follow course and report voluntarily. Business owners have nothing to hide, right? The information provided to FinCEN is not shared with others or other government agencies except for law enforcement operations.
“Regardless of what the courts do, we recommend LLC owners file their report,” said attorney Marcos.
“The world is moving toward more transparency, so some form of BOI will be implemented sooner or later. We are seeing even some states in the USA and other countries creating BOI-like databases and mandates for small businesses”, concluded Attorney Marcos E. Garciaacosta.
As of November 2024, only approximately 6 million LLCs have filed the BOI report, according to FinCEN.gov.
If you already filed BOI, congratulations! If not, please file this requirement as soon as possible. You can file BOI by clicking this link.
Contact Attorney Marcos to Talk about BOI or Other Business Matters
Please feel free to contact our firm if you have any questions regarding CTA-BOI compliance or if you have other business law, immigration or intellectual property issues on your plate.
You can contact us at (480) 324-6378, and we will schedule a consultation with Attorney Marcos E. Garciaacosta.