Corporate Transparency Act Update: FinCEN Extends CTA Reporting Deadline for Companies First Created or Registered in 2024 | Foley Hoag LLP

Key Takeaways:

  • FinCEN has amended its final Beneficial Ownership Information Reporting Rule to allow reporting companies created or registered in 2024 90 days to file their initial reports, instead of the 30-day deadline originally imposed under FinCEN’s regulations.
  • No other changes to FinCEN’s Reporting Rule were made.
  • FinCEN rejected requests to apply the 90-day reporting deadline to all new reporting companies going forward and also declined to extend the deadline to report changes or corrections to beneficial ownership information. 

Summary of Rule Change

On November 29, 2023, the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) announced that it was amending the beneficial ownership information (“BOI”) reporting rule (the “BOI Reporting Rule”) to extend that reporting deadline to 90 calendar days for companies subject to the BOI Reporting Rule under the Corporate Transparency Act (“CTA”), but only for companies created or first registered in 2024 (i.e., non-exempt entities created or registered on or after January 1, 2024, and before January 1, 2025).[1] This action follows a Notice of Proposed Rulemaking (“NPRM”) issued on September 27, 2023, by FinCEN to extend the deadline from 30 days to 90 days for such companies. The extension is effective January 1, 2024. Those who are unfamiliar with the CTA can find additional information in Foley Hoag’s CTA White Paper.

Through this extension, FinCEN continues to recognize compliance and awareness challenges presented by the implementation of the CTA, and more proposed adjustments may come in the future. Indeed, in commentary accompanying the deadline extension, FinCEN stated that “during the first few years of the implementation” of the BOI Reporting Rule, FinCEN “will monitor compliance with the BOI reporting deadlines and will consider whether any adjustments to the permanent reporting timeframe for newly created or registered reporting companies are warranted.”

In the meantime, FinCEN is not currently making any other changes to its final BOI Reporting Rule and rejected calls by some commenters to apply the 90-day reporting deadline (or an even longer extension) to all new reporting companies going forward, also refusing to extend the 30-day deadline to report changes to beneficial ownership information. FinCEN believes that the public will be more familiar with CTA reporting obligations in 2025 and committed to outreach and educational efforts throughout 2024.

As a result, the following chart provides reporting deadlines under the amended BOI Reporting Rule.

FinCEN Commits to Providing Additional Guidance and Rules on CTA Reporting Requirements

Within the commentary accompanying the final rule, FinCEN made several statements concerning additional guidance for reporting companies. First, FinCEN reiterated that a reporting company is deemed to be “created” or “registered” when it receives actual notice or constructive (public) notice, whichever is earlier, that the company has been created or registered. Second, in defense of retaining the 30-day deadline to update or correct previously filed BOI reports, FinCEN stated that the reporting deadline for making an initial BOI report should be extended because of the need to give reporting companies additional time to become aware of the BOI Reporting Rule, collect BOI and company applicant information, and file their initial reports during the first year that the Reporting Rule is effective. FinCEN believes, however, that reporting companies and third-party service providers will have enough time to become familiar with the BOI Reporting Rule before updates and corrections need to be made such that extending the 30-day deadline to make such reports is unnecessary. Finally, FinCEN noted that access to the BOI database, including how financial institutions should obtain customer consent to access the database, will be addressed in upcoming rulemaking as will how financial institutions should handle discrepancies between BOI they obtain directly from customers and BOI obtained from the FinCEN database.

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 [1] See 31 C.F.R. § 1010.380(a)(1)(i)-(ii).

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