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UPDATE: BOI Reporting No Longer Required for Business Entities

Full statement from the Financial Crimes Enforcement Network (FinCEN):
"In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports...While this litigation is ongoing, FinCEN will comply with the order issued by the U.S. District Court for the Eastern District of Texas for as long as it remains in effect. Therefore, reporting companies are not currently required to file their beneficial ownership information with FinCEN and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect. Nevertheless, reporting companies may continue to voluntarily submit beneficial ownership information reports."

Note: At this time, reporting entities MAY voluntarily submit beneficial ownership information reports.

Beneficial Ownership Information (BOI) Reporting 

If you operate your real estate business as a legal entity (e.g., LLC, corporation), an important new federal reporting is an option that may apply to you.  

Under the Corporate Transparency Act (CTA), certain business entities can report information about their beneficial owners to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).  

This process is referred to as Beneficial Ownership Information (BOI) reporting. 

Who or what is a “Beneficial Owner”? 
A beneficial owner is an individual who either directly or indirectly: 
(1) holds significant control over the reporting company, such as a senior officer or key decision-maker, or  
(2) owns or controls 25% or more of the company’s ownership interests. If a corporate entity owns a stake in the company, its ultimate owners are assessed to determine if they meet the 25% ownership threshold. 

Who Needs to Report? 
Most LLCs, corporations, and other similar entities will need to comply, except for businesses that meet certain exemptions, such as larger companies with more than 20 employees and $5 million in annual revenue. 

What are the BOI reporting deadlines? 
Reporting business entities formed before January 1, 2024, must file their initial BOI reports by January 1, 2025. Those formed between January 1, 2024, and January 1, 2025, have 90 days from creation or registration to file. 

Why Does This Matter? 
Failure to comply with BOI reporting can result in civil penalties of $500 per day (adjusted for inflation to $591 per day) and criminal penalties, including a fine of up to $10,000 and/or imprisonment for up to two years. 

Next Steps 

For more key insights on the BOI reporting read this: 5 Fast Facts on Beneficial Ownership Information Reporting. 

NAR Real Estate Compliance Webinar on FinCEN Beneficial Ownership Rule* 

Tuesday, December 10, 2024 | 2-3 pm | ZOOM | FREE  
Please join NAR’s Legal and Advocacy Team for a webinar on the Beneficial Ownership Information Reporting Rule taking place on Tuesday, December 10, 2024, from 2-3 p.m. This webinar will provide real estate professionals and association staff with an overview of FinCEN’s Beneficial Ownership Information Reporting Rule and will provide clarity on what is required under the rule. 

Register