The Ministry of Finance is postponing the deadline for submitting a new BOI form for small businesses

The U.S. Treasury Department has postponed until January 13, 2025 the deadline for millions of small businesses to file a new form known as a Beneficial Ownership Information report.

The Treasury Department had initially required many companies to file the report with the agency’s Financial Crimes Enforcement Network, known as FinCEN, by Jan. 1. Failure to comply may result in fines of more than $10,000.

This delay is due to legal challenges regarding the new reporting requirement under the Corporate Transparency Act.

The rule applies to approximately 32.6 million businesses, including certain corporations, limited liability companies and othersaccording to federal estimates.

Businesses and owners that didn’t comply could face civil penalties of up to $591 per day, adjusted for inflation, according to FinCEN. They also face up to $10,000 in criminal fines and up to two years in prison.

However, many small businesses are exempt. For example, those with gross sales of more than $5 million and more than twenty full-time employees may not need to file a report.

The Ministry of Finance has postponed the compliance deadline following a recent court ruling.

A federal court in Texas had issued a nationwide preliminary injunction on December 3 that temporarily prevented FinCEN from enforcing the rule. However, the 5th U.S. Circuit Court of Appeals reversed that order on Monday.

“Because Treasury recognizes that reporting companies may need additional time to comply given the period during which the interim order was in effect, we have extended the reporting deadline,” FinCEN said. website.

FinCEN did not return CNBC’s request for comment on the number of companies that have filed a BOI report to date.

However, some evidence suggests that few have done so.

The federal government had received about 9.5 million filings as of Dec. 1, according to statistics provided by FinCEN to the office of Rep. French Hill, R-Ark. That figure is about 30% of the estimated total.

Hill has called for a repeal of the Corporate Transparency Act, passed in 2021, which created the BOI requirement. Hill’s office provided the data to CNBC.

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“Most non-exempt reporting companies have not filed their initial reports, presumably because they are unaware of the requirement,” Daniel Stipano, a partner at law firm Davis Polk & Wardwell, wrote in an email.

There is a potential silver lining for companies: FinCEN is “unlikely” to impose financial sanctions “except in cases of bad faith or intentional violations,” Stipano said.

“In its public statements, FinCEN has made clear that its primary goal at this time is to educate the public about the requirement, as opposed to taking enforcement action against non-compliant companies,” he said.

The BOI application is not an annual requirement. Businesses only need to resubmit the form to update or correct information.

Many exempt businesses – such as large corporations, banks, credit unions, tax-exempt entities and public utilities – already set up comparable data.

Companies have different compliance deadlines depending on when they were incorporated.

For example, those created or registered before 2024 have until January 13, 2025 to file their first BOI reports, according to FinCEN. Those who do this on or after January 1, 2025 have 30 days to file a return.

There will likely be additional court rulings that could impact reporting, Stipano said.

First, there are lawsuits pending in the 5th Circuit, which has not yet formally ruled on the constitutionality of the Corporate Transparency Act.

“Legal actions challenging the law have been filed in multiple jurisdictions, and these actions may ultimately reach the Supreme Court,” he wrote. “At this time, it is unclear whether the incoming Trump administration will continue to support the administration’s position in these cases.”