The Financial Crimes Enforcement Network (FinCEN) has issued a proposed rule[1] extending the deadline for covered entities formed in 2024 to file their initial beneficial ownership information reports under the Corporate Transparency Act. The new deadline is 90 days after formation, an increase from the previous 30-day requirement.

Concurrently, the agency issued a news release[2] detailing the new proposed rule.

The news release outlines the proposed revision of the rule as follows:

The Financial Crimes Enforcement Network (FinCEN) is issuing a Notice of Proposed Rulemaking (NPRM) to extend the deadline for certain reporting companies to file their initial beneficial ownership information (BOI) reports. FinCEN is proposing to amend its final BOI Reporting Rule to provide 90 days for reporting companies created or registered in 2024 to file their initial reports, instead of 30 days.[3]

The release further clarifies that this rule change would solely impact entities created or registered in 2024. Due dates for initial reports for entities created or registered before or after 2024 would remain unchanged.

The proposed rule would not make any other changes to the final BOI Reporting Rule: reporting companies created or registered before January 1, 2024, would have until January 1, 2025, to file their initial BOI reports with FinCEN, and entities created or registered on or after January 1, 2025, would have 30 days to file their initial BOI reports.[4]

FinCEN's press release provides the following rationale for this proposed change:

FinCEN believes the proposed extension will have significant benefits. An extension will give reporting companies created or registered in 2024 additional time to understand their regulatory obligations under the Reporting Rule and obtain the required information. They will also have additional time to become familiar with FinCEN’s guidance and educational materials located at www.fincen.gov/boi and resolve questions that may arise in the process of completing their initial BOI reports. After January 1, 2025, however, reporting companies should be familiar with BOI reporting requirements and be in a better position to file required BOI reports on a timely basis.[5]

In its explanation of the proposed rule, the Agency acknowledges that the delay will result in a less immediate availability of a complete database of entities for law enforcement access compared to the original rule. This statement suggests that the agency may be disinclined to further postpone such reporting due to law enforcement considerations. Moreover, the agency is actively soliciting comments on the perceived low impact of this delay on law enforcement interests, as well as any other potential adverse effects of this postponement.

Although FinCEN believes that providing this additional time and flexibility for reporting companies created or registered in 2024 to file their initial BOI reports will benefit reporting companies and their service providers, FinCEN recognizes that the extension could cause a delay in submissions to the BOI database in the first year of its operation. For example, under the proposed rule, if entities are created or registered on December 31, 2024, they would have until April 1, 2025 (90 days after December 31, 2024) to submit their initial BOI reports. In contrast, under the Reporting Rule, law enforcement could expect all compliant reporting companies created or registered on or before December 31, 2024, to have submitted their initial BOI reports by January 30, 2025 (30 days after December 31, 2024). With all of that taken into account, FinCEN still believes that the potential adverse effects of any such delay in the first year of the program are outweighed by the relief they will provide for small businesses, as explained above. FinCEN solicits comment on this assessment, and on whether there are any other potential consequences of the extension that it has not identified.[6]

As revised, CTA rule §1010.380(a) would read as follows:

(a) Reports required; timing of reports—

(1) Initial report. Each reporting company shall file an initial report in the form and manner specified in paragraph (b) of this section as follows:

(i) (A) Any domestic reporting company created on or after January 1, 2024, and before January 1, 2025, shall file a report within 90 calendar days of the earlier of the date on which it receives actual notice that its creation has become effective or the date on which a secretary of state or similar office first provides public notice, such as through a publicly accessible registry, that the domestic reporting company has been created.

(B)Any domestic reporting company created on or after January 1, 2025, shall file a report within 30 calendar days of the earlier of the date on which it receives actual notice that its creation has become effective or the date on which a secretary of state or similar office first provides public notice, such as through a publicly accessible registry, that the domestic reporting company has been created.

(ii) (A) Any entity that becomes a foreign reporting company on or after January 1, 2024, and before January 1, 2025, shall file a report within 90 calendar days of the earlier of the date on which it receives actual notice that it has been registered to do business or the date on which a secretary of state or similar office first provides public notice, such as through a publicly accessible registry, that the foreign reporting company has been registered to do business.

(B) Any entity that becomes a foreign reporting company on or after January 1, 2025, shall file a report within 30 calendar days of the earlier of the date on which it receives actual notice that it has been registered to do business or the date on which a secretary of state or similar office first provides public notice, such as through a publicly accessible registry, that the foreign reporting company has been registered to do business.[7]

[1] RIN: 1506-AB62, “Beneficial Ownership Information Reporting Deadline Extension for Reporting Companies

Created or Registered in 2024,” September 27, 2023 (to be published in the Federal Register on September 28, 2023), https://public-inspection.federalregister.gov/2023-21226.pdf (Retrieved September 27, 2023)

[2] “FinCEN issues a Notice of Proposed Rulemaking to extend the deadline for certain companies to file their beneficial ownership information reports,” FinCEN website, September 27, 2023, https://www.fincen.gov/news/news-releases/fincen-issues-notice-proposed-rulemaking-extend-deadline-certain-companies-file (retrieved September 27, 2023)

[3] “FinCEN issues a Notice of Proposed Rulemaking to extend the deadline for certain companies to file their beneficial ownership information reports,” FinCEN website, September 27, 2023

[4] “FinCEN issues a Notice of Proposed Rulemaking to extend the deadline for certain companies to file their beneficial ownership information reports,” FinCEN website, September 27, 2023

[5] “FinCEN issues a Notice of Proposed Rulemaking to extend the deadline for certain companies to file their beneficial ownership information reports,” FinCEN website, September 27, 2023

[6] RIN: 1506-AB62, “Beneficial Ownership Information Reporting Deadline Extension for Reporting Companies

Created or Registered in 2024,” September 27, 2023

[7] Proposed Rule §1010.380(a)(1), September 27, 2023