Filing a FinCEN BOI report is no longer required (for now) — though your startup may still want to file one anyway.
Here's what you need to know:
FinCEN BOI reports are not currently required, as of December 26, 2024. A court ruling suspended the BOI report requirement on December 3, 2024. A subsequent court ruling removed that suspension on December 23, but another court ruling reinstated the suspension on December 26.
Here's what FinCEN says:
"In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
More information is available on FinCEN's website at https://www.fincen.gov/boi"
Your startup could suddenly be required again to file a BOI report with little notice. There are several active lawsuits challenging FinCEN's BOI reporting requirement. As we saw on December 23, developments in these lawsuits could lead to BOI reports suddenly being required again.
Some startups are filing BOI reports even though they're not required. A reason to do this is to avoid the chance of a late filing, which can occur if the BOI report requirement is reinstated and you either don't notice it or don't have enough time to meet the deadline. It can also make sense to voluntarily file a BOI report if you determine the benefit of not having to pay attention to the situation outweighs the cost of potentially disclosing BOI information to FinCEN for no reason.
If you decide not to file a BOI report for now, be prepared to file at a moment's notice. Many startup attorneys are recommending being prepared to file the BOI report at a moment's notice if you choose not to file one for now. When the December 23 court ruling led to the BOI reporting requirement being reinstated, FinCEN extended deadlines for many businesses, but not all. A small number of businesses were required to file an initial BOI report by the next day, on December 24.
Want to proceed with voluntarily filing a BOI report? If you decide to file a BOI report even though they're not required, you can file directly with FinCEN. While Clerky has a tool for filing BOI reports, FinCEN has temporarily suspended API submissions for everyone, including Clerky.
Here are the latest deadlines FinCEN published prior to the BOI report requirement being suspended again:
- For startups incorporated before January 1, 2024
- Deadline: January 13, 2025
- For startups incorporated January 1 through September 3, 2024
- Deadline: 90 days after incorporation
- For startups incorporated September 4 through September 24, 2024
- Deadline: January 13, 2025
- For startups incorporated September 25 through December 2, 2024
- Deadline: 90 days after incorporation
- For startups incorporated December 3 through December 23, 2024
- Deadline: 111 days after incorporation
- For startups incorporated December 24 through December 31, 2024
- Deadline: 90 days after incorporation
- For startups incorporated January 1, 2025 or later
- Deadline: 30 days after incorporation
If the BOI report requirement is reinstated, FinCEN may extend some or all of these deadlines, though there's no guarantee that they will.
Never heard of BOI reports before? Check out this help center article to learn more about them.
The above reflects our understanding of the situation as of December 26, 2024. We'll continue to monitor ongoing lawsuits regarding the FinCEN BOI report requirement closely.
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New VIP developer perks from Anthropic:
- $500 in API credits for Claude (now supporting tool use!)
- Priority support
- Increased rate limits
What's new:
- You can now file your BOI report through Clerky
- We've arranged for special perks worth up to $3,000 that help non-US founders take advantage of the International Entrepreneur Rule
- Clerky handbooks are now available as free ebooks on Apple Books and Google Play, as well as in EPUB and PDF format for download online
Even more new perks:
Exciting news for startup founders who are looking to enter the US! The International Entrepreneur Rule (IER) might now be easier than ever to use, after recent updates by U.S. Citizen and Immigration Services (USCIS) (more on that below).
To help startups take advantage of this potentially improved process, we've arranged for special IER perks worth up to $3,000:
- For a limited time, Mercury** is offering $2,000 in cash to Clerky startups who deposit the IER fundraising requirement amount ($264,147) within 90 days*
- Ellis Legal, an immigration law firm, is offering Clerky startups $1,000 off one IER application
- SW Law Group, an immigration law firm, is offering Clerky startups 10% off one IER application
To get the Mercury perk, make sure to apply for a Mercury account from your formation checklist on Clerky. To get the perks for Ellis Legal or SW Law Group, go to the Perks page for your startup's team on Clerky and then look for the Immigration category.
On top of these perks, Clerky is also the easiest and fastest way to meet the IER requirements:
- Incorporate Delaware corporation
- Issue stock to founders
- Applicants have to own at least 10% of the startup
- We're the only startup incorporation service to help you get the complete set of attorney-recommended 83(b) election evidence 😎 (requires paid add-on).
- Open Mercury account without having to wait for an EIN from the IRS
- Mercury can help you open an account even while you're waiting for your EIN, so you can get started closing investors as soon as possible. Just make sure to start your Mercury application from your formation checklist on Clerky to enable this.
- Issue safe or convertible notes
- Make sure to issue at least the amount required for the IER. As of July 2024, the threshold is $264,147.
* Earn a cash bonus of $1,000 by depositing at least $20,000 within 90 days of account opening and an additional cash bonus of $1,000 by depositing at least $264,147 within 90 days of account opening. This offer can't be combined with any other offers.
** Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust, Members FDIC.
What is the IER?
The IER allows USCIS to grant startup founders parole to enter the US. Specifically, the IER makes it possible for most non-US startup founders to enter the US as long as they've raised more than $264,147 (as of July 2024) from investors meeting certain criteria. You have to own at least 10% of your startup, and up to three co-founders from the same startup can apply. You can stay in the US for 2.5 years (possibly up to 5) and your spouses can even work in the US too.
The IER has been available since 2021 but has not been popular due in part to very long processing times and unclear requirements. USCIS might be fixing that though. Late last week, they announced that they've worked through the backlog of applications and are actively encouraging people to apply. They also published new FAQs that make it easier for founders to apply by giving more clarity around the process.
We can't be certain, but many are speculating that the announcement and changes signal that USCIS wants to get more startup founders into the US and will be processing applications faster.
Things to consider
The IER could become a great option for non-US startup founders and we're excited for that possibility, but it's important to note:
- Parole isn't the same thing as a visa and there are some practical differences. You should consult an immigration attorney to determine what's best for your specific circumstances.
- Many immigration attorneys recommend thinking of the IER as a backup to a visa. If you're applying for a visa to be able to work on your startup in the US, you can think of the IER as a backup that you might want to apply for at the same time. Or, the IER might be your only option if you're not eligible to apply for a visa.
- The USCIS has specific requirements for the IER. For example, there are requirements that most well-known startup investors will meet, but that not all startup investors will meet. Please don't take any actions in anticipation of using the IER without first consulting an immigration attorney to make sure you take all the requirements into account.
- The funding threshold ($264,147 as of the date of this post) is adjusted for inflation every three years and is next due to be adjusted in October 2024. Based on recent inflation data, we expect the funding threshold to increase when it's adjusted.
- When a new president is elected this November, the new administration may have different views on the IER. While the USCIS may be signaling that they're eager to grant more parole now, this may change when a new administration takes over in January.
- Some countries may have an exit tax for startups that move to another country (like the US). If you're in such a country and your startup raises money from investors, your startup could be considered valuable and trigger an exit tax. You should consult a tax advisor in your country if you have questions about this.
Finally, please keep in mind that it's too soon to know what startups will actually experience with the IER. Nevertheless, the recent updates by the USCIS are promising and might make the IER worth trying in more scenarios. Here at Clerky, we're excited for the prospect of the IER living up to its potential and are excited to help startups who want to try it out.
Good luck!
We're thrilled to announce our new BOI reporting tool! You can now submit all your startup's beneficial ownership information to FinCEN without ever leaving Clerky.
In case you hadn't heard, most startups formed in the US now need to submit ownership information to FinCEN, a government bureau that helps detect financial crimes. This new requirement is a consequence of the Corporate Transparency Act (CTA), which went into effect in January 2024.
Most Clerky startups now need to file a BOI report, with limited exceptions. Please refer to the chart below for information about deadlines:
The penalties for failing to file by these deadlines can be severe. That's why we've made staying compliant as easy as possible. As you approach your deadline, we'll send you reminder emails and in-app notifications. We'll also remind you to submit an updated report if we detect that you've changed any of your information, like your startup's name, address, or beneficial owners.
When the time comes to file, you can submit your information directly from Clerky. We'll pre-fill the report with information we already have from your legal paperwork to make things as easy as possible.
It's worth noting that a recent court decision in Alabama found the Corporate Transparency Act unconstitutional. The ruling won't affect most startups, only members of the plaintiffs in that particular lawsuit, but we're closely monitoring the development of any cases that may impact this requirement more broadly.
Do you still have questions about your startup's BOI report? Are you wondering whether you should get a FinCEN ID to make the process easier? You can find answers to these common questions and more in our help center article What is a BOI report?.
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What's new in our software:
- Non-US founders can now apply for EINs through Clerky
- Startups can now apply for a Mercury bank account while waiting for their EIN
- We've just launched a cap table integration with Pulley
We've also added new perks, plus a limited-time offer:
- Efficient Capital Labs – 25 basis point discount on ECL's financing fees
- Pulley – 15% off your first year when you sign up through Clerky
- Limited-time offer! Mercury — $1,000 cash for eligible Clerky startups that open a Mercury account (minimum deposit required)
Delaware's Court of Chancery recently ordered that Elon Musk’s $55.8 billion compensation package from Tesla be undone. On the surface, the decision can be confusing since Elon Musk has contributed so much to Tesla. Can a court even get involved with compensation?
Since there's a lot of interest in this ruling, we thought it'd be helpful to provide startup founders with a summary of the legal reasoning behind the outcome. So we read through the entire 200-page opinion to make the outline below for you. Enjoy!
What was the logic of the opinion?
Hopefully this gives you a clear understanding of how the case was decided! We've done our best to distill the opinion down to the essence of its logic. If you want to get into the details, you can read the full opinion on the Delaware Court of Chancery's website.
What are startup attorneys saying?
In case it's helpful, we've put together a list of commentary on this case by well-regarded startup attorneys and law firms:
Subject to any changes that might happen if the case is appealed, the key takeaways from these attorneys and law firms are:
- Make sure that stockholders are given relevant information when having them approve decisions involving conflicts of interest.
- Compensation committees should ideally be comprised of directors that don't have a conflict of interest.
- If compensation for a controlling stockholder is unusually large, it should ideally be negotiated, benchmarked, and in service of company objectives.
None of this is new to competent corporate attorneys, but this case provides a high-profile reminder of how Delaware corporate law works.
These takeaways are more likely to be relevant for large companies like Tesla, because most early-stage startup founders aren't giving themselves above-market compensation. In addition, litigation about compensation is very uncommon with early-stage startups, unless there's a scheme to defraud investors or co-founders. This is in part because litigation can easily kill an early-stage startup, which would be counterproductive for stockholders.