CORPORATE TRANSPARENCY ACT (“CTA”) REPORTING REQUIREMENTS

The Corporate Transparency Act (“CTA”) was adopted by Congress in December of 2020 to prevent illegal activities such as money laundering, tax fraud, and terrorism financing. The CTA went into effect on January 1, 2024, requiring all corporations and limited liability companies to report their beneficial owners to the federal government. New reporting requirements require businesses to file a Beneficial Ownership Information (“BOI”) report. All reports need to be filed with the Financial Crimes Enforcement Network (FinCEN), an agency of the U.S. Department of Treasury. Failure to timely file these reports can result in substantial penalties.

WHO NEEDS TO FILE A BOI REPORT?

Business entities required to file a BOI report include domestic and foreign corporations, Limited Liability companies and other entities created by the filing of a document with a Secretary of State or similar governing body. There are 23 types of entities that are exempt from the reporting requirements. These entities include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies. For a list of exempt entities, visit: https://fincen.gov/boi-faqs

HOW TO FILE?

A business required to file a BOI report will do so electronically through a secure filing system available on FinCEN’s BOI E-Filing website https://boiefiling.fincen.gov. Before beginning the online process, certain information will be needed about the business formation, beneficial owners, and identification of beneficial owners. There is no fee for submitting a BOI report to FinCEN. Beneficial Owners of multiple entities can simplify the BOI reporting process by obtaining a FinCEN Identifier (a 12-digit identifying number issued by FinCEN). For more information on creating a FinCEN ID, visit: https://fincenid.fincen.gov/

IMPORTANT REPORTING DEADLINES

A business formed prior to 2024 must file a BOI report prior to December 31, 2024.
A business formed in 2024 must file a BOI report within 90 days after receiving actual or public notice that its creation or registration is effective.
A business formed on or after January 1, 2025 must file a BOI report within 30 days after receiving actual or public notice that its creation or registration is effective.

Additionally, a change to previously reported information about the reporting company itself or its Beneficial Owners require filing an updated report within 30 days after a change occurs.

MORE INFORMATION:

BOI reports can be filed using the guidance issued by FinCEN. For more information on exempt entities, filing requirements, and FAQ’s, please visit the FinCEN website at https://www.fincen.gov/boi.

If you require additional information, please feel free to contact an attorney at Wibbenmeyer Iannelli Law.