Table of Contents:
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!