House Advances Bill to Delay Beneficial Ownership Reporting
December 18, 2023
On Dec. 12, the House passed H.R.5119 - Protect Small Business and Prevent Illicit Financial Activity Act, which would extend various deadlines established in the Corporate Transparency Act (CTA). The CTA mandates that legal entities report their beneficial ownership information to a federal database. The bill passed 420-1.
Why it matters: Reporting deadlines for new entities begin in 2024, while existing entities would start in 2025. The bill would:
- Extend the filing deadline for existing entities from 1/1/25 to 1/1/26.
- Extend the filing deadline to update beneficial ownership information from 30 days to 90 days.
- Address a loophole in the FinCEN regulations that would prohibit reporting companies from answering “unknown” or “unable to identify” to beneficial ownership reporting questions.
The near unanimous support in the House could signal a smooth path in the Senate via “unanimous consent”, though it is unclear what the prospects are. Another option could be moving via a January spending vehicle.
Contact David McCarthy (dmccarthy@crefc.org) with questions.