Potential Extension of the FINCEN Beneficial Ownership Reporting Deadline, Still Advised to Submit Applications Immediately
Getting ready for theBeneficial Ownership Information ("BOI") reporting deadline shift? It seems that theFINCEN deadline, initially set for 2025, is now expected to move to January 1, 2026, for companies obligated to file for 2024. This news comes after the unanimous House of Representatives passage of H.R. 736, also known as the Protect Small Business from Excessive Paperwork Act (Feb. 11, 2025).
But here's the thing—it's crucial that reporting entities and businesses take action now, even if the deadline isn't quite on the horizon yet.
Why so urgent? Well, you see, your company has to provide certain information related to itself, like the state of formation and date, and also details about its owners and controlling persons. If you're unable to provide this information, you might face those dreaded fines for non-reporting failures.
What about owners and controlling persons? They can sell their interests, quit, be fired, move away, or even disappear. And once they do, tracking down necessary information becomes a challenge. To avoid this predicament, it's smart to collect as much info as possible about these individuals while they're still tied to the company.
If any person is reluctant to share this info, they can apply for a personalFINCEN identification number and share it with the company instead. This method is preferred, as it requires you to collect only the innocent ID number.
According to FINCEN, it plans to narrow down the list of businesses required to file BOI reports later on, focusing on those most likely to engage in money laundering activities while closing the loop on low-risk entities, like Homeowners Associations. Keep an eye out for details—no blanket relief just yet!
For now, gather all necessary information to prepare for your 2024 filing as if the deadline was tomorrow. If it gets pushed back to 2026, great! At least you won't waste time trying to get information from a long-gone owner or an uncooperative former employee.
So, compliance pros, if you want to have a stress-free holiday season, start compiling the necessary info now. Good luck!
- To ensure compliance before the extended BOI reporting deadline in 2026, businesses and reporting entities should start gathering necessary information now, even if the initial deadline was expected in 2025.
- The 'boi' or Beneficial Ownership Information includes details about a company's state of formation, date, and its owners and controlling persons, which is crucial for avoiding fines associated with non-reporting failures.
- In case of changes in ownership like sale of interests, departure, termination, relocation, or disappearance of beneficial owners, collecting pertinent information ahead of time is beneficial to prevent tracking difficulties.
- For those reluctant to share their details, FINCEN allows them to obtain a personal identification number, prescribing that the share of relevant info remains limited to their innocent ID number.
- FINCEN representatives have mentioned plans to gradually eliminate certain businesses from BOI report filings, focusing on high-risk entities likely to engage in money laundering activities and concluding the process for low-risk entities like Homeowners Associations.
- To avoid missing the FINCEN deadline or having to deal with obstinate former employees or absentee owners, forward this information to your company as soon as it becomes accessible, to ensure a stress-free holiday season.