Will I Have to File a BOI Report Every Year?

As of January 23rd, 2024, the CTA reporting requirements are not enforceable due to a stay on the effective date of BOI reporting. The information in this article does not include considerations regarding the stay. Entities formed while the stay is in place should be prepared to file reports immediately if/when it is lifted (if the 30-day period has elapsed).


The Beneficial Ownership Information (BOI) reporting requirement, as mandated by the Corporate Transparency Act (CTA), has introduced new compliance obligations for millions of businesses. A common question among business owners is whether they will need to file a BOI report every year 

Initial Filing: What You Need to Know

Upon the formation of a new entity going forward or for any entity that was formed prior to 2024, an initial BOI report must be filed with FinCEN. This initial report includes: 

  • The legal name, any DBA or trade name, principal business address, state of formation, and Tax ID number of the entity. 
  • The full name, date of birth, residential address, ID number from a qualifying document, and an image of the ID (e.g., driver’s license or passport number) of each beneficial owner. 
  • The full name, date of birth, residential or business address, ID number from a qualifying document, and an image of the ID of the company applicant (for entities formed in 2024 and on). 

The deadline for filing the initial report for an entity formed in 2024 is 90 days from formation. Those formed in 2025 and on have only 30 days to file. Entities that were formed prior to January 1, 2024, have until January 1, 2025, to submit their initial report. 

Filing a BOI Report Every Year: Is This Required?

One of the key aspects of BOI reporting under the CTA is that there is no annual filing requirement. Unlike other regulatory filings that may need to be submitted on an annual basis, BOI reports are only required when there is a change in the reported information. This means that once you have filed the initial BOI report, you do not need to file again unless there is a change in beneficial ownership information. 

However, it is important to note that you must file an updated BOI report within 30 days of any change to ensure that FinCEN has the most current information. 

Situations Requiring Updated Filings

While there is no annual filing requirement, there are specific circumstances under which an updated BOI report must be submitted: 

  1. Changes in Beneficial Ownership: If an individual who was previously reported as a beneficial owner no longer meets the criteria, or if a new individual becomes a beneficial owner, an updated report is required. 
  2. Changes in Information: If there are changes to the information previously reported about a beneficial owner, such as a change of address or a new identifying number, an updated report must be filed. 
  3. Changes in Entity Information: If the entity registers a new DBA or moves to a new principal address, it will need to be reported. If the entity completely moves state jurisdictions or converts from a Corporation to an LLC resulting in a change in legal name, this should also be reported.  

Note: Changes in company applicant information do not require an updated report to be filed. If a company applicant moves to a new business address, the company does not need to file an updated report for this.  

Penalties for Non-Compliance 

Failure to comply with BOI reporting requirements can result in significant penalties, including: 

  • Civil penalties of up to $591 per day for each day the violation continues. 
  • Criminal penalties, including fines of up to $10,000 and imprisonment for up to two years. 

Ensuring timely and accurate BOI reporting is essential to avoid these penalties and maintain compliance. 

Best Practices for Compliance 

To stay compliant with BOI reporting requirements, consider the following best practices: 

  1. Regularly Review Ownership Information: Periodically review beneficial ownership information to identify any changes that may require an updated BOI report. 
  1. Establish a Process: Create a standard way for beneficial owners to communicate a change in their information so that it will be reported to FinCEN. Consider having beneficial owners obtain FinCEN Identifier’s. 
  1. Use Compliance Software: Utilize compliance software to streamline the reporting process and ensure that all filings are timely and accurate. 
  1. Stay Informed: Remain up to date with any changes to BOI reporting regulations and guidelines to ensure ongoing compliance. 

Conclusion 

While there is no requirement to file a BOI report every year, it is important to stay vigilant and ensure that any changes in beneficial ownership information are promptly reported – this could result in three filings a year or one every three years. By understanding the requirements and implementing best practices for compliance, businesses can avoid penalties and have peace of mind. 

Entities Created in 2025 Have Shortened Window to Comply with the CTA

Disclaimer: As of December 26th, 2024, the CTA reporting requirements are not enforceable due to a preliminary injunction. The information in this article does not include considerations regarding the preliminary injunction. Entities formed while the injunction is in place should be prepared to file reports immediately if/when the injunction is lifted (if the 30-day period has elapsed).

The Corporate Transparency Act (CTA) is tightening its reporting requirements in 2025 for newly created entities, shortening the time available to comply with the CTA. Beginning January 1, 2025, any domestic or foreign reporting company newly established in the United States must file their initial Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN) within 30 days of their creation or registration.

This change marks a return to the original reporting timeline set by FinCEN after a temporary extension was granted for entities formed in 2024. Those entities enjoyed a 90-day window for initial BOI reporting, offering some breathing room during the early rollout of the CTA. However, this extended timeframe no longer applies in 2025.

In addition to the tight window for initial reporting, entities are also required to update FinCEN with any changes to their beneficial ownership information, such as changes in ownership or management, within the same 30-day timeframe.

Failure to comply with these reporting deadlines may result in significant penalties, including fines and potential criminal liability. To avoid these consequences, businesses should establish clear processes to ensure timely and accurate submissions.

For new entities formed in 2025 and beyond, the key takeaway is clear: Act fast—30 days isn’t much time!

Is the Injunction Helping or Hurting the Corporate Transparency Act (CTA)?

The Corporate Transparency Act (CTA) has encountered significant obstacles in its implementation. Among the most critical is the recent preliminary injunction that prohibits its enforcement. In fact, on January 8, 2025, the third circuit court also issued a preliminary injunction as a result of a separate lawsuit, drawing the nationwide conclusion on the basis of the fifth circuit court ruling in early December 2024.

This development has sparked a debate on whether the injunction and stay is beneficial or detrimental to the CTA’s overall goals. By examining the pros and cons of this injunction, we can better understand its impact on business owners and professionals and the future of corporate transparency.

Pros of the Injunction and Stay: Visibility and Preparation

  1. Increased Awareness:

    One of the most notable benefits of the injunction is the heightened visibility of the CTA and its requirements. Prior to the stay, many business owners (and even professionals) were unaware of the reporting obligations under the CTA, despite the looming deadlines. The legal challenges and the ensuing publicity have brought the CTA into the spotlight, ensuring broader awareness of its implications, which were estimated to require almost 33 million entities to file reports.

  2. Extended Preparation Time:

    Another advantage is the additional time granted to businesses and their advisors to prepare for compliance. The original year-end deadline left many scrambling to understand and meet the requirements. With the enforcement paused, entities and professionals now have a chance to meticulously gather and organize the necessary information without the immediate pressure of looming penalties. This extension allows for more thorough education and planning, potentially reducing errors and improving overall compliance when enforcement resumes.

Cons of the Injunction and Stay: Confusion and Cost

  1. Confusion Among Business Owners:

    The injunction has created a wave of confusion, particularly for those who were just beginning to grasp the new filing requirements. For many small business owners, understanding the CTA was already a steep learning curve. The pause in enforcement has interrupted this process, leading to uncertainty about when, or if, they will need to comply. This ambiguity can undermine confidence in the system and discourage proactive compliance efforts.

  2. Increased Professional Costs:

    The injunction has also led to financial strain for many businesses. Those who sought professional assistance—such as attorneys, CPAs, or compliance experts—to navigate the CTA are now facing mounting expenses. Professionals must continuously update their clients on the evolving legal landscape, which often requires revisiting and revising compliance strategies. These ongoing updates result in additional costs that can be burdensome, particularly for small businesses. In fact, many professionals are encouraging certain clients to file voluntarily to eliminate the ongoing costs caused by the legal whiplash.

  3. Mental Fatigue and Frustration:

    Beyond financial costs, the prolonged uncertainty has taken a toll on the mental well-being of filers. Business owners, already burdened by the complexities of compliance, now face the frustration of repeated changes and delays. Is it better for businesses to voluntarily file to be done with it, or wait for the courts to conclude? This scenario fosters resentment and skepticism toward the government’s handling of the CTA, potentially eroding trust in the broader regulatory framework.

The Fate of Filed Reports

A significant concern is the status of the millions of reports that have already been submitted. If the CTA is ultimately invalidated, what becomes of the data collected? Current laws would likely mandate the disposal of this database, rendering the collected information inaccessible for any legitimate use. This outcome could undermine the intended purpose of the CTA and raise serious questions about the privacy and security of the data during its collection, storage, and disposal.

Do the Cons Outweigh the Pros?

While the pros of increased awareness and additional preparation time are important, the cons highlight deeper systemic issues, especially if the CTA is going to ultimately be enforceable in the end. The confusion, financial strain, and emotional fatigue caused by the injunction have far-reaching implications that could diminish trust in the CTA’s objectives.

Furthermore, the potential invalidation of the CTA and the disposal of submitted reports would represent a significant loss of resources and progress, further complicating the path forward.

Conclusion

The preliminary injunction against the Corporate Transparency Act presents a mixed bag of benefits and drawbacks. While it offers a valuable opportunity for increased education and preparation, it also introduces uncertainty and added costs that weigh heavily on businesses and their advisors. As we all await clarity on the CTA’s future, the government must prioritize transparent communication and decisive action to mitigate these challenges.

Beneficial Ownership Information Reporting Injunction Lifted: 28 Million Reports Remaining to be Filed by January 13th

Update – On December 23, 2024, the Fifth Circuit U.S. Court of Appeals put a “Stay” on the recent U.S. District Court injunction in the Texas Top Cop Shop v. Garland et. al. case. On top of it all, late in the day, FinCEN issued filing deadline relief until January 13, 2025 for most entities.  This means that for 90% of all legal entities (LLCs, corporations, etc.), there is a January 13, 2025, due date for filing a FinCEN Beneficial Ownership Information Report

As of December 1, FinCEN had received only 9.5 million of the 32.6 million required filings for entities existing as of January 1, 2024, plus an additional 5 million filings expected annually for new entities. This means just 25% of required entities have submitted their Beneficial Ownership Information. Non-compliance carries severe penalties, including civil fines of up to $591 per day, criminal fines of up to $10,000 per report, and up to two years of imprisonment. Business owners and professionals now face an urgent, high-stakes deadline early in the new year.

Recommended Steps To Pursue ASAP: 

  1. Obtain FinCEN IDs for Key Owners – If you haven’t already obtained FinCEN IDs for key beneficial owners, especially those that hold multiple entities, you may want to consider expediting obtaining these IDs. Obtaining a FinCEN ID can streamline reporting and also increase privacy for owners.
  2. Engagement Management – For professionals and advisors, it is imperative to have a well-defined engagement letter or other contract with your client that clearly defines the scope of your work and your responsibilities. 
  3. Obtain and Document Key Entity Information – The designation of a “Beneficial Owner” includes both persons with direct or indirect ownership or control of more than 25% of an entity, or certain other persons with substantial control over the entity. Prior to filing, you should have a complete file documenting ownership and control persons of the business, including organization charts, governing legal documents, and ownership tables.  
  4. Account for Key ComplexitiesMake sure to account for additional key complexities when filing your BOIR, including: 
  5. Obtain Beneficial Owner Information – Included with each report will be either the FinCEN ID number for each Beneficial Owner, or the following information: 
    • Full legal name 
    • Date of Birth 
    • Residential Address 
    • A unique identifying number from an acceptable identification document (e.g. passport, driver’s license) 
    • An image of the identification document
  6. File the BOIR – You have two primary options for filing a FinCEN Beneficial Ownership Information Report: 
    1. File directly with FinCEN
    2. File with a third-party software provider like Secure Compliance. Benefits can include: 
      • Automated data collection 
      • Data entry speed and ability to link single owners across multiple entities 
      • Streamlined bulk uploads 
      • Expert support 
  7. Monitor for Developments – Additional developments are expected in the weeks to come, including FinCEN guidance and possibly changes to the law by a new Congress next year. However, given timing – possible future changes cannot be relied upon, and it is imperative to comply with the rules as currently in force. 

Immediate action is imperative for business owners and professionals to ensure compliance with this imminent January 13th, 2025, due date!  

As this imminent and high-stakes deadline for BOI reporting approaches, the ability to file in bulk and collect and manage information with advanced technology is critical for businesses and professionals facing tight time constraints,” said Paul Freidel, CEO of Secure Compliance. “Our platform simplifies mass filings, enhances data security, and ensures the necessary support to meet compliance requirements on time. We are committed to helping businesses avoid penalties and achieve peace of mind with their BOI reporting.

Bulk Entity Upload: Simplify Your Compliance Process 

Navigating the ever-evolving landscape of Beneficial Ownership Information (BOI) reporting can be a challenging task. Recent court rulings have introduced uncertainty to filing timeframes, making it even more difficult for businesses and professionals to stay on top of regulatory requirements. Software designed to make filing more efficient – such as tools that include a bulk entity upload feature – can help. 

bulk entity upload

As a result, firms may be seeking efficient systems that allow them to quickly adapt to any new information, even when changes occur at the last minute. 

Why Bulk Entity Upload is Essential

As demonstrated by the nationwide preliminary injunction issued out of Texas and FinCEN’s subsequent appeal, the regulatory environment can change rapidly. Having a system in place that allows for the quick entry of multiple entities provides professionals with a valuable tool to swiftly adapt to new guidance—especially if it’s issued just days before the January 1, 2025, deadline.  

Secure Compliance’s bulk upload features enable firms to upload information for multiple entities simultaneously, significantly reducing the time and effort required compared to individual data entry. 

We offer both a base bulk upload feature and a premium white-glove version. The differences are outlined below, but whichever version you choose, these features can save your firm valuable time when you need it most.   

Base Bulk Entity Upload

The base bulk entity upload feature is included in our $995 SecurePRO package. With this package, you can download a sample CSV file, enter your entity information, and upload any correctly formatted CSV file. Our software will then process the information into the system. After a successful upload you can add any additional information to individual entities as needed.  

HOW IT WORKS

  1. Data Preparation: Gather and format your entity information for bulk upload, by either downloading our sample CSV file or formatting an existing CSV file to fit for upload.
  2. Processing: Our system processes the data, ensuring all information is filled into separate entity records.  
  3. Review and Submit: You will then be able to review the uploaded data for accuracy, add any beneficial owners, and fill in any remaining information needed. 

White Glove Bulk Entity Upload

We also offer a premium white-glove option, where we take from existing files you already have (such as reports from tax software) and upload it into our system, eliminating the need for you to format your data to meet the requirements of the base bulk upload feature. Simply send us the file, and we’ll take care of the upload for you. To learn more about this service, please contact our sales team.  

HOW IT WORKS

  1. Consultation: Speak with a member of our sales team to discuss the information you have and to learn the specifics about pricing and timelines (this varies depending on individual cases). 
  2. Submit Your Information: Send the file and/or information to our team, and we’ll handle the rest. Once the upload is complete, we’ll notify you so you can add any additional details for your entities as needed. 

Stay Ahead with Secure Compliance

As policy changes continue to shape the compliance landscape, firms must adapt quickly to stay compliant. Bulk entity upload is a crucial tool in this endeavor, providing the efficiency and accuracy needed to manage large volumes of data.  

For more information on how Secure Compliance’s bulk entity upload can benefit your firm, contact us today. Don’t let tight or unclear deadlines overwhelm you. Let Secure Compliance simplify your compliance process.

Q&A: Addressing Misconceptions About BOI Reporting

Beneficial Ownership Information (BOI) reporting is a new component of financial transparency and regulatory compliance in 2024. Despite its importance, many business owners, legal professionals, and accountants have questions and misconceptions about BOI reporting requirements.  

In this blog, we address some of the most common concerns and misconceptions about BOI reporting to help you navigate this complex topic more effectively. 

What is BOI Reporting?

Question: What exactly is Beneficial Ownership Information (BOI) reporting? 

Answer: BOI reporting involves disclosing information about the individuals who own or control a company. This information is required by regulatory authorities to combat financial crimes such as money laundering and terrorist financing. Under the Corporate Transparency Act (CTA), certain entities must report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). 

Who Needs to Report?

Question: Do all companies need to file a BOI report? 

Answer: Not all entities are required to file a BOI report – only those that are formally established by filing with the state or similar office. The CTA primarily targets corporations, limited liability companies (LLCs), and other similar entities formed or registered to do business in the United States. However, there are exemptions for certain entities such as publicly traded companies, financial institutions, and inactive entities. For a detailed list of exemptions, refer to our blog on BOI Reporting Exemptions. 

What Information is Required?

Question: What specific information needs to be reported about owners? 

Answer: The required information includes the full name, date of birth, residential address, a unique identifying number from a driver’s license or passport number, and an image of the ID. If the company was formed in 2024 or later, this information must be reported about company applicants as well. 

Why is BOI Reporting Important?

Question: Why is it necessary to disclose beneficial ownership information? 

Answer: The goal of BOI reporting is to enhance entity structure transparency and prevent the misuse of companies for illegal activities. By requiring companies to disclose their beneficial owners, regulators and government authorities can more effectively monitor and investigate suspicious activities. 

Misconceptions About BOI Reporting

Question: What are some common misconceptions about BOI reporting? 

Answer: One common misconception is that BOI reporting is overly burdensome and time-consuming for all companies. While more complex structures will require professional input, a lot of reports should be relatively straight forward to complete. Another misconception is that BOI information is made public. This information is privately stored and only accessible to authorized government officials, law enforcement, and financial institutions and its regulators. 

How to Ensure Compliance

Question: How can companies ensure they are compliant with BOI reporting requirements? 

Answer: Companies can ensure compliance by implementing internal processes for collecting and verifying beneficial ownership information. It’s also important to keep BOI up to date by filing updated BOI Reports when information changes about an entity. Utilizing compliance software can streamline the reporting process and reduce the risk of errors. For more information on choosing the right compliance software, check out our guide on How to Choose the Right BOI Compliance Software for Your Business. 

The Consequences of Non-Compliance

Question: What are the consequences of failing to comply with BOI reporting requirements? 

Answer: Non-compliance with BOI reporting requirements can result in significant penalties, including daily fines of up to $591/day and criminal charges that include jail time. For more details on the penalties, refer to our blog on FinCEN BOI Penalties. 

Conclusion

By understanding the requirements and addressing common concerns and misconceptions, companies can ensure they remain compliant and avoid potential penalties. If you have further questions or want to explore BOI reporting software solutions, feel free to contact us.