⚠️ ALERT [December 27, 2024]: BOI Reporting Is Now Voluntary As of December 27, 2024, a federal court order has temporarily paused mandatory Beneficial Ownership Information (BOI) reporting. Reporting companies are not required to file BOI reports with FinCEN at this time and will not face penalties for failing to file while the order remains in effect. However, companies may voluntarily submit BOI reports to prepare for future compliance. This development comes after a series of important updates to BOI reporting requirements, including extended deadlines and earlier reinstatement of the Corporate Transparency Act (CTA). So, what does this mean for your business? Let’s dive into the details.

What Is the Corporate Transparency Act (CTA)? The Corporate Transparency Act (CTA) is a key tool aimed at improving financial transparency and preventing the misuse of anonymous shell companies. It was designed to: • Combat financial crimes like money laundering, terrorist financing, and tax evasion. • Enhance financial transparency by requiring businesses to disclose their true beneficial owners. • Level the playing field for law-abiding businesses by closing loopholes exploited by bad actors.

Who Is Required to Report? Under the CTA, most corporations, LLCs, and similar entities must file BOI reports with FinCEN. These reports identify individuals who: 1. Own at least 25% of the company, OR 2. Exercise significant control over the entity. Exemptions from Reporting: Certain entities, like publicly traded companies, regulated financial institutions, and large operating companies, are exempt from filing BOI reports. Current Status: Voluntary Filing Due to Litigation As of December 27, 2024, a federal court ruling has temporarily paused mandatory BOI reporting requirements.

Key Points from the Update: • No Mandatory Filing: Reporting companies are NOT required to file BOI reports while the court order is in effect. • No Penalties: Businesses will not face fines or criminal charges for failing to file during this period. • Voluntary Reporting Option: Companies may voluntarily submit BOI reports to prepare for future compliance. Although this pause provides temporary relief, businesses should stay prepared, as mandatory reporting could resume once litigation is resolved.

Extended Deadlines from Previous Updates FinCEN previously extended filing deadlines due to earlier legal challenges. Here are the latest deadlines to know: 1. For Companies Created or Registered Before January 1, 2024: o New Deadline: January 13, 2025 2. For Companies Created or Registered Between September 4, 2024, and December 23, 2024: o New Deadline: January 13, 2025 3. For Companies Created or Registered Between December 3, 2024, and December 23, 2024: o New Deadline: 21 days from the original filing deadline 4. For Companies Created or Registered On or After January 1, 2025: o Deadline: 30 days from the effective date of creation or registration 5. For Disaster Relief Extensions: o Companies eligible for disaster relief may have deadlines beyond January 13, 2025.

Why Businesses Should Stay Prepared Although BOI reporting is currently voluntary, businesses must be prepared for when the requirements resume. Non-compliance could result in severe penalties.

Penalties for Non-Compliance (When Mandatory Filing Resumes) When mandatory filing resumes, non-compliance could lead to: 1. Civil Fines: o Up to $500 per day for late or incomplete filings. 2. Criminal Penalties: o Willful non-compliance may result in fines of up to $10,000 or imprisonment for up to 2 years, or both. 3. Reputational Risks: o Businesses may face increased regulatory scrutiny and damage to their reputation.

Voluntary Reporting: Should You File Now? Filing BOI reports is voluntary right now, but here’s why some businesses might choose to file early:

Benefits of Filing Now: • Proactive Compliance: Filing early demonstrates good faith and ensures your business is prepared when mandatory reporting resumes. • Streamlined Future Filings: Submitting now can reduce last-minute compliance stress. Reasons to Wait: • Resource Allocation: Small businesses might prefer to focus on other priorities. • Uncertain Timelines: You may want to wait for further clarity on when mandatory reporting will resume.

How to Stay Compliant and Prepare for Future Reporting Follow these steps to ensure you’re ready for BOI reporting when mandatory requirements return: 1. Understand the Requirements: Familiarize yourself with FinCEN’s rules and determine if your company qualifies as a “reporting company.” 2. Gather Required Information: Collect data on your beneficial owners, including: o Full legal names o Birthdates o Residential addresses o Identifying documents (e.g., driver’s license or passport) 3. Set Up Internal Processes: Use this time to establish systems for collecting and managing BOI data. 4. Monitor Updates: Stay informed by subscribing to updates on FinCEN’s website. 5. Seek Professional Advice: Consult legal or compliance experts if you’re unsure about your obligations.

Final Thoughts The recent court orders and ongoing litigation have temporarily paused mandatory BOI reporting, but businesses should use this time to prepare. Staying proactive now can help avoid penalties and compliance headaches in the future. For more details or to stay updated, visit FinCEN’s official BOI reporting page.