The Whirlwind of BOI Reporting & Recent Updates

03.05.2025 Written by: Henningson & Snoxell, Ltd.

As business owners, you are most likely aware that the Corporate Transparency Act (CTA) requires most businesses to file Beneficial Ownership Information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN) to help find and stop illicit financing and increase transparency.

To help you understand the whirlwind of BOI reporting requirements, here is a brief outline of the recent BOI updates:

December 3, 2024: a nationwide preliminary injunction issued on CTA and BOI reporting requirements.
December 23, 2024: a nationwide preliminary injunction lifted pending U.S. Department of Treasury’s appeal.
December 26, 2024: a nationwide preliminary injunction put back in place.
January 7, 2025: a Texas District Court issued an order pausing the CTA enforcement.
January 23, 2025: the U.S. Supreme Court lifted one of the nationwide preliminary injunctions.
February 18, 2025: the second and remaining nationwide preliminary injunction has been lifted, making the CTA and BOI reporting requirements mandatory again.

As of this blog, the CTA and BOI reporting requirements are back in effect and reporting companies must comply to avoid severe penalties. Failure to timely file may result in civil penalties of $591 per day (adjusted annually for inflation), with a maximum penalty of $10,000.00 or criminal penalties of up to two (2) years imprisonment or a $10,000.00 fine.

Filing Deadlines**

For reporting companies formed or registered on or before February 19, 2025, BOI reports must be filed by March 21, 2025.
For reporting companies formed or registered after February 19, 2025, BOI reports must be filed within thirty (30) days of the formation or registration date.
If there is a change in ownership information or company information, you must file an updated BOI report within thirty (30) days of the change.

**If your reporting company received an extension, such as the disaster relief extension, the reporting company has until the applicable extension date, rather than the general deadlines.

**If you are a tax-exempt organization that has received a determination letter to that effect, you are exempt from this reporting requirement. Furthermore, if you are an organization that is presumed to be tax-exempt and as such has received no determination letter, you will also be exempt from the reporting requirement IF your Articles of Incorporation contain the appropriate clauses required by the IRS.

Please use the following link to file your BOI report: https://www.fincen.gov/boi. We encourage you to contact us if you have any questions regarding the CTA or BOI reporting requirements.

Employer Rights & U.S. Immigration and Customs Enforcement (ICE)

02.26.2025 Written by: Henningson & Snoxell, Ltd.

When U.S. Immigration and Customs Enforcement (ICE) conducts a workplace visit, both the federal agents and the business owners have obligations to ensure that proper law enforcement procedures and business protections are respected. ICE officers must present their credentials, which employers have the right to examine, along with any warrants. While ICE officers may freely enter any “public area” of the business (such as lobbies or parking lots), access to “private areas” (like employee offices or break rooms) requires either employer consent or a judicial warrant signed by a judge. It is crucial to understand that administrative warrants (Form I-200 or I-205) require employer consent for entry into private areas, while judicial warrants provide broader authority.

The interaction between businesses and ICE involves established protocols that balance law enforcement objectives with business operations. The employer has the right to have a business representative present during any employee interviews and the right to contact legal counsel. For Form I-9 Audits, ICE must provide prior notification, and employers have three (3) days to produce the forms. If unauthorized employees are identified during an audit, employers have ten (10) days to become compliant. Throughout any ICE visit, both parties should maintain documentation of the interaction. Business owners should understand that they may exercise their rights while also complying with valid legal obligations, ensuring both proper law enforcement procedures and business protections are respected.

We encourage you to contact us regarding any questions or concerns you may have related to this topic. H&S is here to help you and your business comply with your legal obligations. If an employee requires legal assistance related to an ICE workplace visit, please seek legal assistance from an immigration attorney. If you do not know of one or would like a recommendation, please contact us for a referral.

Nationwide Preliminary Injunction on the Corporate Transparency Act (CTA)—What This Means for You

12.10.2024 Written by: Henningson & Snoxell, Ltd.

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction on the enforcement of the Corporate Transparency Act (CTA) reporting requirements for Beneficial Ownership Information (BOI). The reporting requirements that were otherwise required for most business owners effective January 1, 2024, have been challenged on the basis of being unconstitutional.

This is a preliminary injunction that temporarily suspends the enforcement of the CTA, any applicable penalties, and the reporting requirement itself.

What does this mean for you?

1. Stay informed. Any further action by this court, the Fifth Circuit, or potentially the Supreme Court, may affect the preliminary injunction and your obligations under the CTA. Even once the court makes a final determination, the government may appeal the decision, as it has in the Alabama CTA case.
2. No initial or updated filing requirement. At this time, you are not required to comply with the BOI reporting requirements (but if you already filed, that is fine).

Current status of filing
• Businesses formed before January 1, 2024, are not required to meet the January 1, 2025 BOI initial filing deadline.
• Businesses formed after January 1, 2024, are not required to file their initial BOI report within the specified time period (90 days).
• Businesses are not required to file any updated BOI reports within 30 days of the change of information.

1. Be prepared. In the event the injunction is lifted or overturned, you must be prepared to file your BOI report as soon as possible to avoid any penalties.

We will continue to monitor the situation and provide you with additional information as it becomes available. Please let us know if you have any questions in the meantime.

Minnesota Paid Leave Program: Update!

10.18.2024 Written by: Henningson & Snoxell, Ltd.

As you may know, Minnesota passed a Paid Leave program in 2023, which goes into effect January 2026. However, beginning in July 2024, most employers are required to begin submitting quarterly wage detail reports to the Paid Leave program; although, no premiums are paid until after the Paid Leave program becomes effective in 2026.

The first wage detail report is due October 31, 2024, and will be based on wages paid between July 1, 2024, and September 30, 2024.

Reporting

Employers must submit wage detail reports every quarter using the Unemployment Insurance (UI) Online system. The wage detail report is the same report required for UI; therefore, employers already utilizing the UI Online system can submit a single wage detail report that will satisfy the reporting requirement for both programs. Your UI accounts for each employee have been automatically converted into a joint UI/Paid Leave account.

For employers with employees not covered by the UI program, you will need to set up a “Paid Leave Only” account (now available) for each employee not covered by UI. Instructions for setting up your account are now available on the Minnesota Paid Leave website and linked below.

Required Information in Wage Detail Report

Employers must include (1) the first and last name, (2) the Social Security number, (3) wages paid during the specified quarterly period, and (4) hours worked for each employee. Again, this is the same information required under the Unemployment Insurance program.

What do employers need to do at this point?

Create Employee Accounts, if necessary: The “Paid Leave Only” accounts are available here. If you do not have an Unemployment Insurance account for each of your employees, you will need to create a Paid Leave Only account for them. If you already have Unemployment Insurance accounts for your employees, you do NOT need to create any new accounts for them. Your quarterly reports will serve both UI and Paid Leave.
Prepare For the Administrative Obligation: We recommend putting in place administrative procedures for quarterly wage detail reports (i.e., who will be responsible for submitting the wage detail report, if not already in place for UI). Failure to submit the required wage detail reports for each employee is subject to a late fee of $10 per employee, with a minimum late fee of $250; administrative service fee of $25 per employee whose information is incomplete; or 2 percent of the total wages for an omitted employee.
Determine Which Employee’s Wage Reports Are Required: Only covered employees in covered employment are required to have reports filed. “Covered employees” include:
1. Employees who performed at least 50 percent of their employment during the past calendar year in the state of Minnesota;
1. Employees who did not perform 50 percent or more of their employment during the past calendar within any single state or Canada, but who resided within Minnesota for at least 50 percent of the past calendar year; and
1. Employees who did not perform 50 percent or more of their employment during the past calendar year within any single state or Canada, but whose employment is controlled and directed from within Minnesota.

“Covered employment” includes any employment, except for (1) self-employed individuals; (2) independent contractors; or (3) seasonal employees.

Also note, while MN employers are required to participate in the Paid Leave program, they may seek an exemption by applying for a private plan exemption beginning in 2025. The private plan must include at least the same rights, protections, and benefits as those provided to employees under the Paid Leave law. However, at this time, employers are still required to file wage reports until an exemption is approved.

We will continue to update you as more information becomes available. Please contact us with any questions about your obligations as an employer under the wage detail reporting requirements or the new Paid Leave program. We are here to help!

FTC’s Non-Compete Ban is blocked!

09.16.2024 Written by: Henningson & Snoxell, Ltd.

The Federal Trade Commission (FTC) published a final rule banning nearly all non-compete agreements, nationwide, on May 7, 2024, to be effective September 4, 2024. However, a recent lawsuit in the United States District Court for the Eastern District of Texas challenged the final rule’s lawfulness. On August 20, 2024, the Court held that the FTC’s non-compete rule was unlawful, and that the FTC lacks any substantive rule making authority with respect to unfair methods of competition. As such, the rule was blocked and non-compete agreements are still available to the extent allowable under Minnesota noncompete law.

Appeals by the FTC from this ruling are expected. Such appeals would be heard by the Fifth Circuit Court of Appeals and possibly even the U.S. Supreme Court, both of which have issued recent decisions reducing the power of federal agencies.

H&S is here to assist you with your questions and concerns regarding non-compete agreements. Give us a call to learn how we can help you continue to protect your business interests.

Corporate Transparency Act: New Reporting Requirement for Beneficial Ownership Information

12.22.2023 Written by: Henningson & Snoxell, Ltd.

Starting January 1, 2024, numerous businesses in the United States will be required to disclose details under the Corporate Transparency Act (CTA) regarding their beneficial owners—those who ultimately have ownership or exert control over the company. This information must be submitted to the Financial Crimes Enforcement Network (FinCEN), which operates as a bureau within the U.S. Department of the Treasury.

Does my company have to report?

The CTA mandates that corporations, limited liability companies, and similar entities must report if they are either: (i) established by filing with a Secretary of State or an equivalent office under State or Indian Tribe laws, or (ii) foreign entities registered to operate in the United States, except for certain exempt entities. Furthermore, most partnerships, including Limited Partnerships (LPs), Limited Liability Partnerships (LLPs), and Limited Liability Limited Partnerships (LLLPs), fall under the CTA’s reporting requirements, as they are typically formed through a state-level filing.

There are many exempt entities, including, but not limited to, public companies, banks, credit unions, tax-exempt entities, and large private companies.

What does my company need to report?

Beneficial owners of reporting companies will first need to be established based on the criteria set forth by FinCEN. Reporting companies will then need to disclose information about these individuals, such as name, date of birth, address, unique ID number, and image, as well as the entity’s name, address, formation jurisdiction and tax identifier.

For entities created or registered after January 1, 2024, there is an additional report needed for the “company applicant.” The company applicant is the individual who first files or registers the entity. Reporting companies established or registered before January 1, 2024, are not required to report information about their company applicants or update this information, as long as it was accurate when initially reported.

When should we report?

Starting January 1, 2024, FinCEN will begin accepting Beneficial Ownership Information (BOI) reports. The deadlines vary based on the company’s formation or registration date:

Companies created or registered before January 1, 2024, must submit their BOI by January 1, 2025.
Companies formed or registered between January 1, 2024, and December 31, 2024, need to report BOI within 90 days after the effective notice of their formation or registration.
For companies established or registered on or after January 1, 2025, BOI must be filed within 30 days following the effective notice of their creation or registration.
Any updates or corrections to previously filed beneficial ownership information should be reported to FinCEN within 30 days of the change.

What are penalties for non-compliance?

Willful failure to report or update ownership information, or providing false information, can lead to severe civil or criminal penalties, including daily fines or imprisonment. Senior officers may be held accountable for their company’s non-compliance. Penalties also apply for intentionally causing a company to fail in its reporting obligations or for providing false information. However, there is a safe harbor from penalties for voluntarily correcting inaccurate reports within 90 days of the original deadline.

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Please note, all information presented in this post is for general informational purposes only, and the content provided is a summary. Please contact our business attorneys to update your governing documents and contracts and for more information and guidance regarding the effect of the CTA on your operations.

Coming Soon: Minnesota Retirement Program

10.05.2023 Written by: Henningson & Snoxell, Ltd.

The Minnesota Secure Choice Retirement Program Act (the “Program”) establishes a retirement savings program available to state residents employed by covered employers (those with five or more employees who do not already have a retirement program in place). Under the Program, individual retirement accounts (IRAs) will be established for eligible employees to fund with a portion of their paycheck.

Program Features:

Participation in the Program is mandatory for employers that do not currently sponsor their own workforce retirement savings plan, such as a 401(k) plan, or those who have not sponsored one in the 12 months prior to the “Mandatory Implementation” date.
Employers are not required to contribute to their employees’ retirement plan.
“Covered Employees” include any employee of a covered employer who is at least 18 years old and satisfies any other criteria that may be established by the Program’s Board of Directors.
Employees can:
- elect whether their contributions will be pre-tax or post-tax (Roth)
- change their contribution rate
- opt out of participation entirely
Employers must provide Program Information to all covered employees (the Program Information required has not yet been made available by the State).
Annual limits on contributions to an account under this Program will mirror the Federal IRA limits which are subject to annual adjustments. For 2023, these limits are $6,500 for individuals under the age of 50 and $7,500 for individuals over the age of 50.
The Program is set to begin on or after January 1, 2025. The Board of Directors will meet on March 1, 2024, to establish administrative procedures for the Program.

Program Governance: Board of Directors

The Program will be administered by a Board of Directors comprised of seven (7) members: the executive director of the Minnesota State Retirement System; the executive director of the State Board of Investment; three (3) members chosen by the Legislative Commission on Pensions and Retirement with retirement plan expertise; one (1) private-sector member (appointed by the Governor) with plan administration experience; and one (1) small business owner (appointed by the Governor).

Note to Employers:

This means additional requirements for you including, but not limited to, withholding contributions from payroll, remitting the withheld contributions to the program, ensuring all necessary information is provided to employees, etc. So, be sure to pay close attention when this Program becomes effective as civil penalties will be imposed for compliance failures.

We do our best to keep employers updated so that you can make informed decisions as you operate your business. For now, there is no requirement that you implement anything. But if you have any questions or concerns about this Program and what it may mean for your business, please feel free to reach out. A member of our team would be happy to guide you through this change.

Ban on Captive Audiences

09.15.2023 Written by: Henningson & Snoxell, Ltd.

New legislation went into effect on August 1, 2023 that prohibits employers from discharging, disciplining, or otherwise penalizing employees who decline to attend or participate in employer-sponsored meetings, the primary purpose of which is to communicate the employer’s opinion concerning religious or political matters (“Captive Audience Meetings”). The law also protects employees who decline to receive or listen to employer-sponsored communications. Under the statute, retaliation, or the threat thereof, is prohibited as a means of inducing an employee to attend such meetings or receive such communications. And, under no circumstances may an employer take adverse action against an employee making a good-faith report of a violation or suspected violation of this statute.

The statute does not:

Prohibit communication of information that the employer is required by law to communicate.
Limit employers’ right to conduct meetings involving religious or political matters if attendance or listening is wholly voluntary.
Limit employers’ right to communicate with employees or require the attendance of employees at meetings and other events that are necessary for employees to perform their lawfully required job duties.

Employers must post and keep posted a notice of employee rights, where employee notices are customarily posted if they have not already. Please contact us regarding our best practice recommendations for your workplace or with any questions regarding this new ban on captive audiences.

The CARES Act and COVID-19 Loan Programs

04.02.2020 Written by: Henningson & Snoxell, Ltd.

The Coronavirus Aid, Relieve, and Economic Security (CARES) Act was recently signed into law to assist businesses (including nonprofits and churches) during the COVID-19 crisis. In doing so, the CARES Act initiated several new programs:

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How the FFCRA Affects Businesses with Less than 50 Employees

03.31.2020 Written by: Henningson & Snoxell, Ltd.

How the Families First Coronavirus Response Act Affects Businesses with Less than 50 Employees

[Update to this post here – 4/3/2020]

More COVID-19 Resources

Are you a business owner with fewer than 50 employees (for a profit, nonprofit or religious organization)? Are you confused about the specific criteria required to claim an exemption to the expanded leave provisions of the Family’s First Coronavirus Response Act (FFCRA)? If so, you’re not alone. Recently, the U.S. Department of Labor provided much-needed information and guidance.