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Reinstated Compliance Deadlines for Beneficial Ownership Reporting: What You Need to Know

December 28, 2024

The U.S. Fifth Circuit Court of Appeals has reinstated the Corporate Transparency Act (“CTA“) and its Beneficial Ownership Information (“BOI“) Reporting Requirements. This decision, issued on December 23, 2024, in Texas Top Cop Shop, Inc. v. Garland, lifted a prior injunction that had paused enforcement. The ruling emphasizes the government’s strong position in defending the CTA’s constitutionality, and FinCEN has now extended several key deadlines to help businesses comply.

1.FinCEN’s updated guidance provides critical extensions for BOI reporting:

1.1Businesses Formed Before January 1, 2024

Must file their BOI reports by January 13, 2025, an extension from the original January 1 deadline.

1.2Businesses Formed Between September 4, 2024, and December 23, 2024

Must also file by January 13, 2025.

1.3Businesses Formed Between December 3, 2024, and December 23, 2024

Granted a 21-day extension from their original filing deadlines.

1.4Businesses Formed After January 1, 2025

Must file their BOI reports within 30 days of formation or registration.

2.BOI Reporting Requirements and Applicability

The BOI reporting requirements, established under the CTA, aim to increase transparency and combat illicit financial activity. These rules apply to “reporting companies,” which include most small and mid-sized businesses operating as LLCs, corporations, or similar entities.

For mortgage brokers and their affiliated companies, compliance is particularly relevant. Many brokers operate within structures likely to fall under these requirements, especially if their entities were formed as LLCs or small corporations. Reporting companies must submit information on their beneficial owners, including full names, birth dates, residential addresses, and unique identifying numbers (e.g., driver’s licenses or passports).

While the CTA exempts certain types of entities, such as publicly traded companies and large organizations, mortgage brokers should carefully evaluate their corporate structures to determine whether these exemptions apply.

3.Minimizing Compliance Risks

FinCEN estimates that completing a BOI report will take most businesses approximately 90 minutes. Although this process is not particularly time-intensive, waiting until the last minute could increase the risk of errors or missed deadlines. Businesses should begin gathering the necessary information and establish a plan for timely submission to avoid noncompliance.

For mortgage companies and their affiliates, compliance with BOI reporting requirements is not just a regulatory necessity—it’s an opportunity to ensure corporate transparency and build trust with partners and clients. Proactively addressing these obligations can protect businesses from potential penalties while enhancing operational credibility.

4.Take Action Now

With the new January 13, 2025, deadline, reporting companies still have time to comply. Businesses are encouraged to confirm their status, compile the necessary details about their beneficial owners, and submit their BOI reports as soon as possible. Early action will help mitigate risks and ensure a smooth compliance process.

If you’re unsure about your obligations or need assistance navigating these requirements, EASE Compliance Advisors is here to help.