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Beneficial Ownership Information Requirement Update

Posted on by MKA

What is BOI?

Starting January 1, 2024, the Corporate Transparency Act (CTA) went into effect. The CTA requires the disclosure of the Beneficial Ownership Information (BOI) of certain entities from people who own or control a company. The CTA is not a part of the tax code, as the new BOI report is filed with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), not the IRS.

Its purpose is to ensure transparency in ownership structures and prevent the misuse of shell companies for illicit activities. A beneficial owner is an individual who owns or controls a certain percentage of a company (e.g., 25%) or has significant influence over its operations. Companies that must report often including corporations, limited liability companies (LLCs), and other similar entities formed or registered with the state. If any information changes, such updates to ownership, control, or address, an updated report must be filed within 30 days of the change.

Florida Hurricane Extension

The deadline for Beneficial Ownership Information (BOI) for existing reporting companies has been extended by six months for regions impacted by Hurricanes Milton to July 1, 2025. This extension also applies to newly formed companies with BOI reporting deadlines falling within the disaster period which is October 4, 2024 – January 2, 2025.

Link to U.S Treasury hurricane extension announcement.

Court Ruling on Corporate Transparency Act

A federal judge in the Eastern District of Texas on Tuesday issued a nationwide injunction on the enforcement of the Corporate Transparency Act (CTA). The ruling comes less than one month before the Jan. 1, 2025, deadline for companies formed prior to 2024 to report their beneficial ownership information (BOI) to the U.S. Treasury’s Financial Crimes Enforcement Network. The AICPA, FICPA and other state societies have previously called for BOI reporting postponements until the court cases surrounding the CTA have been resolved. MKA is closely monitoring this situation as more information becomes available.

BOI Resources

Completing the BOI is free and straight forward for simple corporate structures. Below are resources to help you complete the form: