Navigating the 2025 Updates to Beneficial Ownership Information and FinCEN Reporting Requirements

In 2023 alone, more than $300 billion (about $920 per person in the US) was laundered through opaque corporate structures in the U.S. As 2025 approaches, businesses must adapt or face significant penalties. The Beneficial Ownership Information (BOI) reporting requirement from the Financial Crimes Enforcement Network (FinCEN) initially took effect on January 1, 2024. Effective January 1, 2025, the FinCEN is rolling out updates that could drastically change how companies report BOI. 

Why These Changes Matter 

“These updates are not just a regulatory change but a seismic shift in how businesses must operate,” says Kate Strauss, a Denver-based attorney who practices business law for the A/E/C industry. “Companies will need to adapt quickly to these tightened regulations or risk significant consequences.” 

The new updates are intended to curb illicit activities like money laundering, terrorism financing, and other financial crimes. 

Who Does This Affect? 

So, who is impacted by the changes to BOI reporting requirements under the Corporate Transparency Act? Just about every company operating in the U.S., including: 

• Corporations: Most domestic corporations formed in any U.S. state or tribal jurisdiction and foreign companies registered to do business domestically.  

• Limited Liability Companies: All domestic LLCs formed in any state and foreign LLCs registered in the U.S. 

• Other Similar Entities: Any other entity filing a document with a U.S. state, tribal, or territorial government, including LLPs, LPs, business trusts, and other similar organizations.  

For more information on companies who are exempt from the BOI reporting requirement, please see the list provided by FinCEN.

Key Updates Effective January 1, 2025

1.     Shortened Reporting Deadlines: Companies created or registered on or after January 1, 2025, must file their initial BOI report within 30 calendar days of receiving actual or public notice that their creation or registration is effective. Additionally, companies will need to report any updates or corrections to their BOI within 30- days of any changes, aligning with the tightened timelines introduced with the 2025 updates. This is a significant change from the previous 90-day reporting window for entities formed in 2024. Companies formed before January 1, 2024, still have until January 1, 2025, to file their initial reports. 

2.     Enhanced Transparency in Real Estate Transactions: Beginning December 1, 2025, FinCEN will require reporting on certain non-financed residential real estate transfers. These include cash transactions or transactions that involve legal entities or trusts. This rule is aimed at curbing money laundering through real estate purchases involving legal entities or trusts. The rule applies to non-financed transfers of residential real estate where the property is transferred to a legal entity or trust. This includes a wide range of property types such as single-family homes, townhouses, condominiums, cooperatives, and even vacant land intended for residential development. The responsibility to report these transactions typically falls on real estate professionals involved in the closing or settlement process, such as settlement agents, title insurance agents, escrow agents, and attorneys. FinCEN has introduced a "reporting cascade" system, which outlines a hierarchy of professionals responsible for filing the report. This system ensures that only one report is filed per transaction. 

3.     New Reporting Requirements for Company Applicants: For entities created or registered on or after January 1, 2024, the new regulations require reporting of up to two (2) “company applicants” —the individuals primarily responsible for filing the formation documents. This information must be included in the initial BOI report. Once a company applicant's information is submitted in the BOI report, it becomes a permanent part of the entity's record with FinCEN. Even if the company applicant’s relationship with the entity changes—such as if they leave the company or are no longer involved with it—their information remains on file and cannot be removed. This provision ensures that FinCEN and law enforcement agencies can always trace the origin of the entity back to the individuals who were involved in its creation. 

 4.     Disregarded Entities and Entities that Ceased to Exist Prior to Initial BOI Report Due Date: For disregarded entities that do not have their own Tax Identification Number (“TIN”), such entities may report the TIN of their owner or the first owner in a chain of disregarded entities with a TIN. This is consistent with the IRS rules regarding the use of TINs for disregarded entities. Even if a Reporting Company ceases to exist before its initial report is due, if it existed on or after January 1, 2024, it must still file a BOI report. 

What You Need to Do

For businesses and their advisors, these changes necessitate a proactive approach to BOI reporting. Here are some practical steps to take: 

• Review and Update Internal Procedures: Ensure that your company’s procedures for collecting and reporting beneficial ownership information are in line with the new requirements. This might involve updating your compliance manuals and training staff on the new timelines.  

• Identify and Document Company Applicants: If your company was formed on or after January 1, 2024, make sure that the individuals who filed or directed the filing of the formation documents are accurately reported as company applicants. Ensure that the information provided about company applicants is accurate and complete at the time of filing. Any errors could complicate future compliance efforts or lead to legal issues. 

• Monitor for Changes: Stay vigilant about any changes in beneficial ownership or other reportable information and be prepared to update your filings within the new 30-day window.  

The 2025 updates to BOI reporting are a critical part of the U.S. government’s efforts to increase corporate transparency and prevent financial crimes. By understanding and complying with these new requirements, your business can avoid penalties and contribute to a more transparent business environment.  

If you have any questions about how these changes affect your company or need assistance with BOI reporting, our firm is here to help! Contact us today to ensure your compliance with the latest FinCEN regulations.