Ministry of Finance delays deadline for small businesses to submit new BOI form

The U.S. Treasury Department has extended the deadline for millions of small businesses to January 13, 2025 to file a new form, known as a Beneficial Ownership Disclosure Report.

The Treasury Department had originally required many companies to file the report with the agency’s Financial Crimes Enforcement Network, known as FinCEN, by Jan. 1. Failure to comply results in potential fines exceeding $10,000.

This delay comes as a result of legal challenges to the new reporting requirement under the Corporate Transparency Act.

The rule applies to around 32.6 million companies, including certain companies, limited liability companies and otheraccording to federal discretion.

Businesses and owners who failed to comply would potentially face civil penalties of up to $591 per day, adjusted for inflation, according to FinCEN. They can also face up to $10,000 in criminal fines and up to two years in prison.

However, many small businesses are exempt. For example, individuals with more than $5 million in gross sales and more than 20 full-time employees do not need to file a report.

“Because the Treasury Department recognizes that reporting companies may need additional time to comply given the period during which the preliminary injunction had been in effect, we have extended the reporting deadline,” according to FinCEN website.

FinCEN did not return a request from CNBC for comment on the number of companies that have filed a BOI report to date.

However, some data suggest that few have done so.

The federal government had received about 9.5 million applications per year. Dec. 1, according to statistics provided by FinCEN to the office of Rep. French Hill, R-Ark. That figure is about 30% of the estimated total.

Hill has called for repeal of the Corporate Transparency Act, passed in 2021, which created the BOI requirement. Hill’s office provided the data to CNBC.

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“Most non-exempt reporting companies have not filed their initial reports, presumably because they are unaware of the requirement,” Daniel Stipano, a partner at the law firm Davis Polk & Wardwell, wrote in an email.

There is a potential silver lining for companies: FinCEN is “unlikely” to impose financial penalties “except in cases of bad faith or willful violations,” Stipano said.

“In its public statements, FinCEN has made clear that its primary goal at this time is to educate the public about the requirement as opposed to taking enforcement action against non-compliant companies,” he said.

Many exempt businesses—such as large corporations, banks, credit unions, tax-exempt entities, and public utilities— already furnished similar data.

Corporations have different compliance deadlines depending on when they were formed.

For example, those created or registered before 2024 have until January 13, 2025 to file their initial BOI reports, according to FinCEN. Those who do so on or after January 1, 2025, have 30 days to file a report.

There will likely be additional court decisions that could affect reporting, Stipano said.

First, litigation is ongoing in the 5th Circuit, which has not formally ruled on the constitutionality of the Corporate Transparency Act.

“Legal cases challenging the law have been filed in multiple jurisdictions, and these cases may ultimately reach the Supreme Court,” he wrote. “At this time, it is unclear whether the incoming Trump administration will continue to support the government’s position on these matters.”