Legislation Seeks to Extend Deadlines for Corporate Transparency Act Compliance

On August 1, 2023, sponsors introduced the “Protect Small Business and Prevent Illicit Financial Activity Act” (H.R. 5119), to the United States House of Representatives, which eventually passed the Act and referred it to the United States Senate on December 13, 2023.

H.R. 5119 seeks to provide reporting companies with additional time to file beneficial ownership information by altering the reporting deadlines. H.R. 5119 also includes a prohibition on FinCEN, however there appears to be a typo that obscures its true meaning. We have included the proposed prohibition below:

(H) UNABLE TO OBTAIN.—FinCEN may not by rule, guidance, or otherwise, permit a reporting company from submitting a report relating to the inability of the reporting company to obtain or identify information in the alternative to submitting a report required under this subsection.

Based on the current version of the proposed text of Section 31 USC 5336 § (b)(1)(H) it appears that Congress is attempting to prohibit FinCEN from permitting a Reporting Company to file a report about its inability to obtain Beneficial Ownership Information, in lieu of filing a Beneficial Ownership Information Report.

H.R. 5119 codifies the deadline to file a Beneficial Ownership Information Report to 90 days in the event of formation or any changes in beneficial ownership.  This is consistent with the Department of the Treasury’s practice pursuant to 31 C.F.R. § 1010 (2023). However, the act also clarifies that the Treasury cannot adjust these reporting deadlines through rules, guidance, or any other means.

For more information about compliance with the Corporate Transparency Act, contact tlauridson@garfieldhecht.com.