What Impact Does the Recent Lawsuit Have on Your Beneficial Ownership Reporting?

Apr 2, 2024
Best practices for small businesses, Headlines

As you probably know, most US businesses are required to report company ownership information to the Financial Crimes Enforcement Network (FinCEN) by the end of 2024. The purpose of this “beneficial ownership” reporting (part of the Corporate Transparency Act (CTA)) is to determine the individuals who ultimately own or control businesses created in the US, as well as foreign companies doing business in the US.

However, there have been some recent challenges to the legality of this reporting. The National Small Business Administration (SBA) recently won a lawsuit that may exempt its members from the requirement. However, this decision only applies to members of the National Small Business Administration, which is a small subset of all US companies subject to the reporting requirements.

The US Treasury Department is likely to file an appeal to this ruling. While other entities such as the American Bar Association, the American Institute of Public Accountants (AICPA), and the American Bankers Association have requested delays in the filing deadline, no other lawsuits are pending at this time.

Therefore, as of this writing, the reporting deadline of December 31, 2024 still applies to most US businesses. We believe the safest course of action for your company is to prepare as though you will need to comply.

The reporting itself is fairly straightforward. Before completing the online report, gather the necessary information for your business:

Full legal name of your business, along with any trade name or “doing business as” name
Complete current US address
State, Tribal, or foreign jurisdiction of formation
IRS Taxpayer Identification Number

And gather the following information for each beneficial owner and company applicant:

Full legal name
Date of birth
Complete current address
Unique identifying number and issuing jurisdiction from, and image of, one of the following non-expired documents:
US passport
State driver’s license
Identification document issued by a state, local government, or tribe

For more information or to file a report using the BOI E-Filing System, visit Beneficial Ownership Information Reporting | FinCEN.gov.

Please contact your Mize Relationship Manager with any questions.