Time is ticking for millions of small businesses across the U.S. to comply with a new federal reporting requirement—or face hefty fines and possible criminal penalties. The Treasury Department has officially set March 21 as the deadline for businesses to report their “beneficial ownership information” (BOI), a move aimed at increasing financial transparency and preventing illicit activities such as money laundering and fraud.
Why the Urgency?
The Corporate Transparency Act (CTA), enacted in 2021, mandates that certain businesses disclose who ultimately owns or controls them. This measure is intended to curb the misuse of shell companies and other opaque business structures that bad actors often use to conceal their identities. However, businesses have been caught in a whirlwind of changing deadlines, legal battles, and uncertainty over when compliance would actually be enforced.
A recent ruling from the U.S. District Court for the Eastern District of Texas lifted a nationwide injunction, clearing the way for the Treasury’s Financial Crimes Enforcement Network (FinCEN) to implement the reporting requirement. With that hurdle removed, businesses must now act swiftly to meet the deadline—or risk significant penalties.
Who Must Comply?
An estimated 32.6 million businesses fall under the reporting requirement, including certain corporations, limited liability companies (LLCs), and other business entities. If you own or control a business that meets these criteria, you are legally obligated to submit the required ownership information to FinCEN.
Failure to comply could result in:
- Daily civil penalties of up to $591 (adjusted for inflation)
- Criminal fines of up to $10,000
- Potential imprisonment for up to two years
More Delays Ahead?
Despite setting the March 21 deadline, FinCEN has hinted that further extensions could still be on the table. In a recent notice, the agency acknowledged that businesses may need additional time to comply, stating that it will provide updates on any further modifications to the timeline.
For now, however, the message is clear: Businesses should prepare to file their BOI reports as soon as possible to avoid penalties.
What Business Owners Should Do Next
- Determine if Your Business is Affected – Not all businesses are required to file. Check FinCEN’s criteria to see if you need to report.
- Gather Required Information – Identify individuals who own or control your company and compile the necessary documentation.
- Submit Your Report on Time – Ensure you file before March 21 to avoid fines or legal consequences.
- Stay Updated – Keep an eye on Treasury and FinCEN announcements for potential deadline modifications.
Final Thoughts
With potential fines, legal action, and operational disruptions at stake, small businesses must take this reporting requirement seriously. While FinCEN has left room for flexibility, business owners shouldn’t bank on further delays. If your company is required to comply, now is the time to act—before the clock runs out.
Luyanda is a digital marketing & SEO professional. She is a part of the Minority Business Review digital marketing team. She is a Boston Media House Graduate who obtained a Diploma in Media Practice majoring in Digital Marketing.