Business Ownership Federal Filing Requirements Again on Hold

Yet another change concerning the new federal Beneficial Ownership Information (BOI) reporting requirements has been announced. There will be no fines or penalties for failing to make the required filings by March 21, 2025. Instead, the Treasury Department will be announcing a new rule concerning the filing requirements by that date, March 21st. PAMED will continue to monitor and provide an update following the issuance of the new rule.

The requirement was originally to take effect at the start of 2025 but was placed on hold due to a national injunction granted in federal court. On February 17, 2025, a federal court granted a stay of the injunction, which initially allowed the reporting requirements to take effect. 

All filing is made via a secure online filing system. The filing system is accessed via this link: https://fincen.gov/boi. The willful failure to report complete or updated beneficial ownership information, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required report may be held accountable for that failure.

Here is additional background information on the requirement:

Who needs to file?

“Reporting companies” are required to file. A reporting company is an entity that meets the definition of reporting company and does not qualify for an exemption. Generally, a reporting company includes any entity created by having filed a document with the secretary of state or other government entity. Corporations, Limited Liability Companies (LLCs) and S corporations are reporting companies as they were established via document filings with the state. Reporting companies may be domestic reporting companies or foreign reporting companies depending upon under whose laws they were established.

As mentioned above, entities that would otherwise need to file do not need to if they qualify for an exemption. There are 23 exemptions. 501c non-profits are exempt. Most financial services entities are exempt, as well. Healthcare-related entities are not included in the list of exemptions. The complete list of exemptions is available in the guide that this article will link to.

Solely owned, or partner owned, medical practices would be unlikely to qualify as a reporting company as such entities would not typically have been created by filing documents with the state. However, it is important that any owner consult legal counsel to determine whether their practice meets the definition of a reporting company.

What information needs to be reported?

A reporting company must file information about the company and its “beneficial owners.” Company information includes name, address and other identifying information. Owner information includes name, date of birth, address and other identifying information. Reporting companies established on or after January 1, 2024 are required to report additional information concerning the individual(s) who established the company.

A beneficial owner is an individual who owns or controls at least 25 percent of a company or has substantial control over the company. An individual might be a beneficial owner through substantial control, ownership interests, or both. Reporting companies are not required to report the reason (i.e., substantial control or ownership interests) that an individual is a beneficial owner.

More than one individual may exercise substantial control over an entity. An individual meeting at least one of the following requirements will be deemed to exercise substantial control: (1) the individual is a senior officer; (2) the individual has authority to appoint or remove certain officers or a majority of directors of the reporting company; (3) the individual is an important decision-maker; or (4) the individual has any other form of substantial control over the reporting company.

Reaching the 25 percent ownership interest requirement may be met in multiple ways. Any of the following may be an ownership interest: equity, stock, or voting rights; a capital or profit interest; convertible instruments; options or other non-binding privileges to buy or sell any of the foregoing; and any other instrument, contract, or other mechanism used to establish ownership. A reporting company may have multiple types of ownership interests.