The Financial Crimes Enforcement Network (FinCEN) has proposed a new regulation under the Corporate Transparency Act (the CTA) to provide an extension of time to newly formed companies to file their beneficial ownership information (BOI). Under the current rules, entities created or registered on or after January 1, 2024 (i.e., the CTA's effective date) have only 30 days to disclose their BOI to FinCEN. The amendment, if finalized, would extend this deadline to 90 days for entities formed during 2024. Entities formed prior to 2024 still have 12 months to disclose their BOI to FinCEN (i.e., until January 1, 2025).
Considering the scope and complexity of the CTA, this proposed extension is undeniably a positive development. A 60-day extension would provide several benefits, including granting businesses additional time to better understand and navigate the CTA, resolve questions, and obtain the necessary information to complete their initial BOI reports.
Regardless of whether the proposed regulation is finalized, it is advisable for businesses to avoid delaying preparing for the CTA. In our latest Bloomberg Law article, published on September 12, 2023, we recommend 7 important steps to avoid unnecessary fire drills beginning in the new year. These steps, along with additional information on the CTA, can be reviewed here. (Copyright 2023 Bloomberg Industry Group, Inc. (800-372-1033 www.bloombergindustry.com. Reproduced with permission.)
The Notice of Proposed Rulemaking is scheduled to be published in the Federal Register on September 28, 2023, and will be available online here.
