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On December 12, 2023, the U.S. House of Representatives passed a bill that might delay some initial Beneficial Ownership Information (BOI) reports required under the Corporate Transparency Act (CTA). The bipartisan bill introduced by Rep. Zachary Nunn (R-IA) is called the “Protect Small Business and Prevent Illicit Financial Activity Act”. The House voted 420-1 to amend the standing BOI rule to adjust certain deadlines. Although the final rule remained essentially unchanged for almost three years, as the initial implementation date of January 1, 2024 comes near, commenters are uneasy about the effect this new law will have on small businesses and have been pushing for change.
Proposed Changes
The proposed changes to the current rule would be as follows:
- Entities established before January 1, 2024, now have until December 31, 2025 to file their initial BOI reports, rather than December 31, 2024 as the final rule currently stands. In other words, the existing entities as of January 1, 2024 would have two full years to comply, instead of one as the law currently stands.
- For entities established on or after January 1, 2025, the initial filing deadline is extended to 90 days following their formation – the current rules have a 30 day deadline.
- All reporting companies will have 90 days to file any updates to their BOI reports if previously reported information has changed. The current rules have a 30 day deadline.
What Hasn’t Changed
There are a few aspects of the rule would remain standing even if this new bill ultimately becomes law:
- Entities established on or after January 1, 2024, and before January 1, 2025 have 90 days to file their initial BOI report. This timeframe is unchanged from an amendment to the final rule from November 29, 2023.
- Corrected reports must be filed within 30 days of when the company becomes aware, or should have become aware, of any erroneous information previously reported.
It’s important to realize that the Senate and POTUS still need to vote on this bill for the amendments to be final.
It was a landslide vote in the House, but it doesn’t necessarily mean the same will happen when the Senate votes, or that the Senate will even take the matter up. The Senate was scheduled to recess Dec. 15, 2023, for the holidays, but the break was pushed back a week to address an array of other pressing topics. It was a landslide vote in the The Corporate Transparency Act is still current law, so it’s still very important to be ready for 2024 reporting requirements and deadlines as they currently stand. Under current rules, reporting companies established in 2024 will have 90 days to file their initial BOI reports and existing companies need to prepare by December 31, 2024, to report their information to FinCEN. Stay tuned this week for updates! See the bill here: Text – H.R.5119 – 118th Congress (2023-2024): Protect Small Business and Prevent Illicit Financial Activity Act | Congress.gov | Library of Congress
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