FinCEN – the Financial Crimes Enforcement Network of the U.S. Treasury – on November 29th announced that it was issuing a final rule to adopt its proposed rule extending the filing deadline for reporting companies formed or registered to do business during 2024.
FinCEN announced that the extension will give reporting companies created or registered in 2024 more time (90 days, instead of the 30 days originally required in FinCEN’s Reporting Rule) to become familiar with the guidance and educational materials recently published by FinCEN on its website. The regulator also suggested that it would give this initial cohort of reporting companies additional time to resolve questions that may arise in the process of completing their initial BOI reports. FinCEN also anticipates that this deadline extension will make compliance easier for these first filers under the new reporting requirement and will promote the creation of a highly useful BOI database, as required by Congress.
The Extended Reporting Rule, expected to be published in the Federal Register on November 30, will only apply to entities formed (or first registered to do business in the U.S.) on or after January 1, 2024 and before January 1, 2025. Entities formed (or first registered to do business in the U.S.) on or after January 1, 2025, will have only 30 calendar days from the date of formation (or registration) to file their initial BOI reports.
FinCEN’s actions suggest several important conclusions:
- FinCEN is not planning to delay the January 1, 2024 deadline.
If FinCEN was planning to extend the deadline (which is now only 32 days away) if would not have taken this most recent action. Today’s announcement reinforces the conclusion that FinCEN is committed to launch the new law at the first of the year.
- FinCEN still has a lot to do.
FinCEN still has not finalized the form of the BOI report, has not launched its filing portal, has not disclosed the technical specifications for its filing API, has not launched the page to apply for a FinCEN Identifier and has not launched its consumer help center. Each of these will be critical to the success of FinCEN’s launch and would, one would expect, be something FinCEN ought to complete well before January 1.
- Small businesses and their advisors need to implement their planning now.
At this point, law firms and accounting firms should have decided what role they will plan. Law firms and accounting firms that want to assist their clients in the process, should be implementing technology solutions to assist in that process. Reporting companies should know whether they are likely to be exempt. Reporting companies that are on the edge of an exemption, should be considering whether they can take steps to put them more clearly into an exemption.
Reporting companies that are not exempt should be adopting CTA compliance policies, appointing CTA compliance officers and implementing corporate governance agreements to ensure that they will be able to access their beneficial ownership information when needed to file their BOI reports.