The Ministry of Finance delays the reporting deadline for beneficial ownership for small businesses

An upcoming Treasury Department deadline for millions of small businesses to meet a new “beneficial ownership information” reporting requirement was delayed again after a court order suspended enforcement.

The 5th U.S. Circuit Court of Appeals issued an order late Dec. 26 that halted enforcement while the court “considers the parties’ weighty substantive arguments” about the constitutionality of the Corporate Transparency Act, which created the BOI reporting requirement, the order said.

The new deadline, which had been January 13, is now unclear.

“While it is not known how long the injunction will remain in effect, the matter is scheduled for oral argument a bank on March 25, 2025, so we expect the injunction to take effect at least until March,” Daniel Stipano, a partner at the law firm Davis Polk & Wardwell, wrote in an email.

Meanwhile, companies are not required to file BOI reports with the Financial Crimes Enforcement Network, known as FinCEN, which is part of the Treasury Department.

Additionally, companies are not subject to liability if they fail to file BOI reports while the order remains in effect, FinCEN wrote Friday on its website.

Businesses and owners who failed to comply with the reporting rules were potentially subject to civil penalties of up to $591 per day. They can also face up to $10,000 in criminal fines and up to two years in prison.

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The BOI report’s data helps the federal government identify people who directly or indirectly own or control a business to prevent criminals from hiding illegal activity conducted through shell companies or opaque ownership structures, the Treasury Department said.

The rule applies to around 32.6 million companies, including certain companies, limited liability companies and otheraccording to federal discretion. Many are exempt from the requirement, such as businesses with more than $5 million in gross sales and more than 20 full-time employees.

“Reporting companies may continue to voluntarily submit beneficial ownership information reports,” according to FinCEN.