Corporate Transparency Act and Beneficial Ownership Information Reporting

The Corporate Transparency Act (“CTA”) was enacted by Congress on January 1, 2021, as part of the National Defense Authorization Act.

Commencing in 2024, numerous companies will be required to submit their Beneficial Ownership Information (BOI) to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). The Corporate Transparency Act mandates that every entity fitting the criteria of a “reporting company” must file a BOI report.

Filing Requirements:

1. Most active corporations, LLCs, and other businesses formed by filing a document with a Secretary of State’s office in the United States are required to file, with an exception for the following types of companies:

• Publicly traded companies, banks and other financial institutions, tax-exempt nonprofits, public utilities, and some large businesses. These are already subject to other regulatory requirements.
• Companies with more than 20 full-time employees and over $5 million in revenues
• See the Small Business Compliance Guide, Chapter 1.2 for the list of all exempted entities.

2. Filing dates and penalties:

• Companies created or registered prior to 1/1/2024 have until 1/1/2025 to report.
• Companies created or registered on or after 1/1/2024 must report within 90 days.
• Companies created or registered on or after 1/1/2025 must report within 30 days.
• Failure to report may be subject to civil penalties of up to $500/day.

3. Reporting and information:

• Reporting companies will report beneficial ownership through FinCEN’s website, only available for reporting on or after 1/1/ 2024. There is no fee for submitting this report. Information required to report include the following:

1. Company legal name and current principal place of business street address in the U.S.
2. Any assumed business name (DBA) used by the company.
3. Taxpayer identification number (TIN or EIN)
4. Each Beneficial Owner’s name; birthdate; residential street address; and an identifying number with an image of an acceptable ID (e.g., driver’s license or passport).
5. Each Company Applicant’s name; birthdate; residential street address, (applicants whose business is submitting registration documents may use their business address); and an identifying number with an image of an acceptable ID (e.g., driver’s license or passport).
6. There is no fee, and this is not an annual report. Only updates and corrections are necessary.

Companies should familiarize themselves with the filing requirements and beneficial ownership information required by the U.S. Treasury FinCIN and be prepared to report in 2024, if required. Failure to file or reporting fraudulent information may result in civil penalties, criminal prosecution, or both.