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Corporate Transparency Act: Proposed Rule May Extend Certain Reporting Deadlines

On September 29, 2022, the Financial Crimes Enforcement Network (FinCEN) issued a final rule (the Final Rule) implementing the Corporate Transparency Act’s beneficial ownership information (BOI) provisions. A breakdown of the Final Rule and its operative provisions can be found in an earlier Business Minute article.

Among other provisions, the Final Rule required all reporting companies formed or registered after January 1, 2024 to report certain identifying information tied to its Beneficial Owners and Company Applicants within 30 days of registering or organizing with a Secretary of State (or equivalent office; in Wisconsin this would be the Department of Financial Institutions). Many expressed concerns with this timeline, suggesting that the 30-day deadline was too short for reporting companies to fully comply with their reporting requirements. FinCEN sympathized with these concerns and, as of Sept. 28, 2023, proposed to amend the reporting rule to ease the administrative burden.

Under the proposed rule, reporting companies created on or after January 1, 2024 through January 1, 2025 would instead have 90 days to submit their initial BOI reports. This provides reporting companies with an additional 60 days to determine if they are subject to the Final Rule and, if so, gather and report necessary BOI information.

It is crucial to note that the Proposed Rule does not change any other reporting timelines. Reporting companies organized or registered before January 1, 2024 will still need to file their initial BOI report on or before January 1, 2025 and companies organized or registered after January 1, 2025 will still need to file their BOI report within 30 days of organizing or registering with their Secretary of State (or equivalent office).

The proposed rule is not yet final, and written comments may be submitted to FinCEN on or before October 302023.

DISCLAIMER: The information provided is for general informational purposes only. This post is not updated to account for changes in the law and should not be considered tax or legal advice. This article is not intended to create an attorney-client relationship. You should consult with legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.

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