West Virginia Secretary of State offers update on federal reporting requirement for beneficial ownership information from business owners.
A new federal law took effect in 2024 that requires many new and existing businesses to report their ownership information to the federal government.
As mandated by the Corporate Transparency Act passed by Congress, businesses registered prior to Jan. 1, 2024, have until Jan. 1, 2025, to file a Beneficial Ownership Information Report with the U.S. Department of Treasury’s Financial Crimes Enforcement Network.
The federal BOI Report is designed to increase transparency in company ownership by identifying the individuals who ultimately control or benefit from a business. The federal government believes these filings help combat money laundering, fraud, and other illicit activities by making it harder to hide behind complex ownership structures. BOI Reports are not public information and are only accessible to authorized agencies for purposes such as investigating potential criminal activity related to business ownership.
As of Dec. 5, a federal court in Texas issued an amended injunction preventing FinCEN from enforcing its beneficial ownership information reporting requirements nationwide. FinCEN has since appealed the injunction and issued the following guidance to businesses in response:
“In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
Currently, 23 exemptions exist for specific business structures. In the event that the injunction is lifted, businesses not falling under one of these exemptions must file by the deadline or face federal penalties of up to $500 per day.
While the WV Secretary of State’s Office has no role in collecting Beneficial Ownership Information or enforcing penalties prescribed by federal law, the Office has sent several notices to business owners to ensure they are aware of this new requirement.
“Even though our office has no authority in this process, we understand and appreciate that many of our registered businesses are impacted by the new federal law,” said Sarah Carey, business director for the WV Secretary of State’s Office. “That is why we are repeatedly communicating with West Virginia businesses, informing them of this critical deadline. It is important for businesses to know that all questions regarding reporting and compliance should be directed to FinCEN.”
Filing a Beneficial Ownership Information Report is free and will only be required once unless ownership information needs corrected or updated in the future.
