Companies created or registered in 2024 will have extra time
to file initial beneficial ownership information (BOI) reports under a new rule
finalized by the Financial Crimes Enforcement Network (FinCEN). Reporting
companies will have 90 calendar days from the date they receive actual or
public notice of their creation or registration, according to an agency press
release.
FinCEN said it will not accept BOI reports from reporting
companies until Jan. 1, 2024, adding that no reports should be submitted before
this date.
“This deadline extension will have significant benefits and
will provide valuable extra time for company applicants and for reporting
companies created or registered in 2024 to understand this new regulatory
obligation and obtain the required information to file their BOI reports,”
FinCEN Director Andrea Gacki said in the release.
Newly created or registered companies will benefit from
having additional time to familiarize themselves with relevant guidance and
educational materials and to resolve questions that may arise during the
process of completing their initial BOI reports. FinCEN also expects the
extension to ease compliance burdens for first-time filers and will facilitate
the congressionally required creation of a new, user-friendly BOI database.
The Independent Community Bankers of America (ICBA) applauded
the final rule but also noted it has repeatedly urged FinCEN to withdraw BOI
requirements for banks, and the trade group believes the deadline extension should
also apply to new reporting companies created or registered in 2025.
“ICBA is fully aware of the added burden that reporting BOI
will have on reporting companies – a burden also felt by community banks,” ICBA
Senior Regulatory Counsel Rhonda Thomas-Whitley wrote in a letter to FinCEN. “We
discussed this burden in our response to FinCEN’s proposed deadline, noting
that it did not heed the Regulatory Flexibility Act (RFA), which mandates
federal agencies to consider the challenges of small businesses.”
Thomas-Whitley went on to describe the numerous challenges
new companies face in their first months of operation.
“The 30-day filing period provided in the final rule does
not take into account the many challenges with complying,” she wrote. “Entities
will need time to conduct appropriate due diligence to determine the company
applicant and beneficial owners, to collect the required information from the
beneficial owners and company applicants, and to provide the required
information about the company, its beneficial owners, and its company
applicants to FinCEN.”
Reporting companies created or registered before Jan. 1,
2024, will continue to have until Jan. 1, 2025, to file their initial BOI
reports with FinCEN, and reporting companies created or registered on or after
Jan. 1, 2025, will continue to have 30 calendar days to file their initial BOI
reports with FinCEN.