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Federal Register / Vol. 86, No. 233 / Wednesday, December 8, 2021 / Proposed Rules
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beneficial information in a timely manner and ensure a level playing field between all legal entities that constitute reporting companies.
A one-year reporting deadline is designed to provide reporting companies sufficient time to receive notice of the reporting requirement, conduct appropriate due diligence to determine the company applicant and beneficial owners, collect the required information from the beneficial owners and company applicants, and provide the required information about the company, its beneficial owners, and its company applicants to FinCEN. FinCEN
intends to work with secretaries of state or similar offices and to leverage other communication channels to ensure that reporting companies in existence prior to the effective date of the regulations receive timely notice of and guidance on their BOI reporting obligations. In proposing a one-year deadline, FinCEN
has sought to ensure that the database is highly useful to law enforcement by obtaining BOI for existing entities as soon as possible while also minimizing burdens on reporting companies and secretaries of state and similar offices that will need adequate time to comply with the new rules. FinCEN invites comments on whether the one-year period for preexisting reporting companies to file their initial report is reasonable.
Proposed 31 CFR 1010.380a1iv would require entities that are not reporting companies by virtue of one or more exemptions to file a report within 30 calendar days after the date on which the entity no longer meets any exemption criteria.148 Whenever an entity does not meet the criteria for an exemption and otherwise qualifies as a reporting company, it becomes subject to the CTAs requirement that each reporting company shall submit to FinCEN a report of its BOI.149
Although the CTA specifies when newly formed and existing reporting companies must file their reports,150 it does not in most cases specify when a report must be filed by a previously exempt entity.151 FinCEN believes that 148 The trigger date is delayed by statute 180 days for legal entities described in section 501c of the Internal Revenue Code that lose their tax exemption. 31 U.S.C. 5336a11xixI, proposed 31 CFR 1010.380d2xixA.
149 31 U.S.C. 5336b1A.
150 31 U.S.C. 5336b1B; 5336b1C.
151 The CTA specifies that a report must be filed at the time an entity no longer meets the criteria for the subsidiary exemption and the grandfathered inactive business exemption. See 31 U.S.C.
5336b2D, E. However, in light of the express obligation in section 5336b1A for all reporting companies to file reports, FinCEN does not interpret the provisions focused on those two exemptions as
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30 days from the date an exemption ceases to apply is a reasonable time for once-exempt entities to file an initial report with FinCEN. Specifically, FinCEN believes that keeping the database updated and accurate is essential to ensuring it is highly useful and that 30 days provides sufficient time for entities that previously evaluated their eligibility for an exemption from the reporting requirements and claimed such an exemption to collect and file the required BOI with FinCEN. Again, FinCEN invites comments on whether this proposed timeframe is reasonable.
ii. Update or Correction of Reports The provision at 31 U.S.C.
5336b1D requires reporting companies to update information submitted in prior reports to FinCEN in a timely manner, and not later than one year after the date on which there is a change with respect to any of the information described in 31 U.S.C.
5336b2. The CTA also provides a safe harbor for persons who inadvertently submit inaccurate information in a report to FinCEN if they, among other things, voluntarily and promptly file a corrected report no later than 90 days after the submission of the inaccurate report.
FinCEN proposes to provide reporting companies with 14 calendar days to correct any inaccurate information filed with FinCEN from the date on which the inaccuracy is discovered and 30
calendar days to update with FinCEN
information that has changed after filing. Specifically, proposed 31 CFR
1010.380a3 would require reporting companies to file a report to correct inaccurately filed information within 14
calendar days after the date on which the reporting company becomes aware or has reason to know that any required information contained in any report that the reporting company filed with FinCEN was inaccurate when filed and remains inaccurate. This would include information about any beneficial owner and the reporting company. FinCEN
believes 14 calendar days provides adequate time for a reporting company, after it knows or has reason to know that relieving reporting companies of a filing obligation when they no longer meet the criteria for other exemptions. While the provisions focused on those two exemptions are arguably unnecessary in light of the general filing obligation, Congress may have included those provisions to make itself clear, as it may have had particular concern about those two exemptions. See, e.g., Loving v. IRS, 742 F.3d 1013, 1019 D.C. Cir. 2014 recognizing that, despite the general desire to avoid surplusage, lawmakers, like Shakespeare characters, sometimes employ overlap or redundancy so as to remove any doubt and make doubly sure.

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it has made an inaccurate filing, to conduct appropriate due diligence and correct the information. This time frame is intended to be consistent with the 14calendar-day timeframe for a newly formed or registered reporting company to file an initial report with FinCEN.
FinCEN believes quickly correcting errors is essential for fulfilling Congresss instruction that BOI reported to the agency be accurate, complete, and highly useful. 152 FinCEN
anticipates this deadline will present a low burden on a reporting company that has discovered that inaccurate information has inadvertently been filed. It also provides incentives to reporting companies to ensure that accurate information is filed at the time an initial or updated submission is made to FinCEN, which is consistent with the broader goal of maintaining an accurate database for law enforcement and other authorized users.
Proposed 31 CFR 1010.380a3 also notes that a corrected report filed under this paragraph within this 14-day period shall be deemed to satisfy 31 U.S.C.
5336h3CiIbb 153 if filed within 90 calendar days after the date on which an inaccurate report is filed.
The CTA provides that the deadline for updating information established by regulations must be in a timely manner but not later than one year after there was a change in the information. FinCEN is proposing a 30calendar-day deadline for updating information that was accurate when filed but has subsequently changed.
Specifically, proposed 31 CFR
1010.380a2 would require reporting companies to file an updated report within 30 calendar days after the date on which there is any change with respect to any information previously submitted to FinCEN, including any change with respect to who is a beneficial owner of a reporting company, as well as any change with respect to information reported for any particular beneficial owner or applicant.
This proposed rule would also apply to a reporting company that subsequently becomes eligible for an exemption from 152 31

U.S.C. 5336b4bii.
provision at 31 U.S.C. 5336h3C
provides that a person shall not be subject to civil or criminal penalties under 31 U.S.C. 5336h3A
if the person has reason to believe that any report submitted by that person to FinCEN contains inaccurate information and, in accordance with regulations issued by the Secretary, voluntarily and promptly, and in no case later than 90 days after the date on which the person submitted the report, submits a report containing corrected information.
However, this safe harbor does not apply if, at the time the person submits the report, the person acts for the purpose of evading the reporting requirements and has actual knowledge that any information contained in the report is inaccurate.
153 The
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