⛔️ FinCEN BOI Reports

Only foreign companies must file BOI reports now. Companies created inside the United States are no longer required to report their beneficial ownership information as required by the Corporate Transparency Act.

On Sunday morning, at 10:30 a.m., the U.S. Treasury released another press release regarding Beneficial Ownership Reporting under the Corporate Transparency Act. The short and sweet missive states that the Department will not enforce the CTA against domestic companies at all. Companies formed outside the United States must still file their reports by March 21.

It’s rare to see a foreign company doing business in the United States as a foreign company. Instead, they typically create a U.S.-based entity that is wholly owned by the foreign company. Under this scenario, these companies may argue that they have no duty to file the BOI report in the U.S.

The Corporate Transparency Act, which Congress passed, does not provide an exception for filing the BOI reports. All courts where the issue has been raised—except a Texas District Court and the Fifth District Court of Appeals—have found the law to be constitutional and enforceable.

So it will be interesting to see 1) if anyone has standing to challenge the non-enforcement of the law, and 2) if anyone with such standing will undertake the treasure and time expense to litigate the issue.

In any event, if you are a domestic (U.S.-formed and existing) company that fails to file a BOI report by March 21 or at any time, you will not be subject to any penalties or prosecution from the U.S. Treasury Department. However, the way this has been going back and forth over the past nine months, keep your eyes and ears open for further developments as this issue moves back to the legislative and judicial branches for further review and consideration.