Central ND News

FinCEN issued an interim final rule modifying the requirements under the Corporate Transparency Act. The rule announced that U.S. companies and persons are no longer required to submit beneficial ownership information (BOI) to FinCEN. This change applies only to entities formed under foreign laws that have registered to operate in the U.S. by filing with a corresponding state or tribal office. U.S. entities, previously termed "domestic reporting companies," and their beneficial owners are exempt from this requirement.

Foreign entities matching the new "reporting company" definition without exemptions must report their BOI to FinCEN by April 25, 2025. These entities will not have to disclose U.S. persons as beneficial owners, and U.S. persons will not have to report BOI for foreign entities, even if they are beneficial owners.

The Corporate Transparency Act, enacted by Congress in 2021, mandates that U.S. businesses disclose their ownership details as part of efforts to limit illicit activities. The rule change affects various companies required since January 1, 2024, to report ownership details to the Financial Crimes Enforcement Network. The scope includes corporations, LLCs, partnerships, and trade names formed or registered in the U.S.

Exemptions apply to 23 types of entities, such as publicly traded companies, nonprofits, and large operating companies. The FinCEN Small Entity Compliance Guide outlines specific exemptions.

Businesses formed or registered before January 1, 2024, must report BOI by January 1, 2025. Those formed in 2024 must comply within 90 days of registration effectiveness. Post-2025 entities must report within 30 days of effective registration.

According to FinCEN, non-compliance with BOI reporting may result in civil penalties of $500 daily and criminal penalties, including up to two years imprisonment and a $10,000 fine.

Disclaimer: The North Dakota Office of the Secretary of State is not involved in BOI reporting and provides this information as a courtesy. Additional details can be found on FinCEN's BOI Reporting website.