Farmers and ranchers have been subject to a fair amount of whiplash over the last few months regarding the Beneficial Ownership Information reporting requirements under the Corporate Transparency Act.
Congress passed the Corporate Transparency Act in 2021 as part of the National Defense Authorization Act, which requires all legally recognized business entities in the United States to report information about all beneficial owners (the individuals who own or control the company) to the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury. This report is known as Beneficial Ownership Information.
A beneficial owner is someone who, either directly or indirectly, has a significant ownership stake in the company. The individual either has a major influence on the company’s decisions, owns at least 25% of the company’s shares or has a similar level of control over the company’s equity.
The purpose of BOI reporting is to prevent and combat criminal activities, prevent the misuse of corporations, aid law enforcement, and expose criminals. By requiring the reporting of certain information, law enforcement and federal agencies can monitor and prosecute people who evade taxes, hide their wealth, and defraud their employees and customers. The reporting may also prevent the misuse of corporations and other business entities for criminal gain.
To stay in compliance with BOI reporting requirements, farmers, ranchers and other businessowners were initially going to be required to file their business information with FinCEN by Jan. 1, 2025, to avoid fines and potential jailtime. However, the requirements were halted by a federal court in early December, effectively pausing all first-of-year reporting deadlines.
The injunction was then overturned on Dec. 23 by the United States Court of Appeals for the Fifth Circuit, reinstating the January deadline. The same court then overturned the ruling on Dec. 26, delaying the deadline indefinitely once again.
Despite the regulatory back and forth, Oklahoma Farm Bureau encourages members to continue gathering their reporting materials in anticipation of a new deadline announcement that could come at any time.
Required business information
- Full legal name
- Trade name or doing-business-as name
- Address of the principal place of business
- State, tribal or foreign jurisdiction of formation
Beneficial owners’ information
- Full legal name
- Date of birth
- Current address
- Unique identifying documents (U.S. passport, state-issued driver’s license or other identification document issued by a state, local government or tribe)
Note: Any changes to details provided by a reporting company in their initial filing must be reported to FinCEN within thirty (30) days, regardless of when the entity was created.
While no filing deadline is currently active, having information and materials ready will reduce any potential headaches or last-minute scrambles to find pertinent filing information.
A person may be subject to civil and criminal penalties for causing a company to not file or report incomplete or false BOI to FinCEN. Civil penalties include fines of up to $500 a day. Criminal penalties include imprisonment for up to two (2) years and a fine of up to $10,000.
Reports may be filed online on FinCEN’s website.
Additional information can be found in FinCEN’s Small Entity Compliance Guide. For more detailed filing guidance, OKFB recommends seeking the assistance of a licensed attorney.
