If you own a Limited Liability Company (LLC), corporation, or other non-exempt entity and haven’t addressed this yet, it could cost you. A new federal reporting requirement went into effect on January 1, 2024, and it’s critical for business owners to understand their obligations.
The Corporate Transparency Act (CTA) is an anti-money laundering initiative that requires reporting companies to disclose the identity of and information about beneficial owners of the entities. Under the CTA, every LLC, corporation, and other non-exempt entity must file a Beneficial Ownership Interest Report (BOIR) with the Federal Crimes Enforcement Network (FinCEN). Failure to comply could result in civil penalties ranging from $500 to $10,000 per violation and criminal penalties of up to two years of imprisonment.
Who must file?
Only entities classified as “Reporting Companies” are required to file. According to the statute, a Reporting Company is defined as:
"Every LLC, corporation, or other entity created by filing a document with a Secretary of State or an equivalent office."
If your business fits this definition, you are obligated to submit a BOIR to FinCEN.
How do I determine if my company is a Reporting Company?
The FinCEN offers the Small Business Entity Compliance Guide which includes a helpful decision tree to determine if your entity qualifies as a Reporting Company. The guide is an excellent resource for small business owners navigating this new requirement.
There are 23 exemptions, including special rules they pertain to a pooled investment vehicle:
Am I a Beneficial Owner?
You are considered a Beneficial Owner if you are an individual who, either directly or indirectly:
Exercises substantial control over the company, or
Owns or controls at least 25% of the company’s ownership interests.
When filing a Beneficial Ownership Interest Report (BOIR), you’ll need to provide specific personal identifying information for each Beneficial Owner of the Reporting Company.
Additionally, for entities created after January 1, 2024, reporting companies must also disclose the identity of "applicants," which is defined as any individual who files an application to form an LLC, company, or other non-exempt entity.
When is the filing deadline?
For Reporting Companies created or registered in the United States before January 1, 2024, the BOIR filing deadline is Monday, January 13, 2025.
Reporting companies created or registered in the United States on or after Sept. 4, 2024, that had a filing deadline between Dec. 3, 2024, and Dec. 23, 2024, have until Monday, January 13, 2025, to file initial BOI reports with FinCEN.
Reporting companies created or registered in the United States on or after December 3, 2024, and on or before December 23, 2024, have an additional 21 days from their original filing deadline to file initial BOI reports with FinCEN.
For Reporting Companies created or registered in the United States on or after January 1, 2025, you must file the BOIR within 30 calendar days of receiving actual or public notice that the creation or registration is effective.
Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond Jan. 13, 2025. These companies should abide by whichever deadline falls later.
Additionally, if there are any changes to the information you’ve reported about the company or its beneficial owners, you are required to file an updated BOIR within 30 calendar days of the change.
Will filing cost me anything to file?
No, it is completely free and takes only a few minutes. You can get started by visiting the FinCEN website. For additional details, refer to FinCEN's official resources to ensure compliance.
Why does this matter?
Noncompliance is not just a bureaucratic headache-it comes with real financial and legal risks. Protect your business by ensuring you meet these requirements.
If you have any questions about whether you are required to file a BOIR or need assistance with your filing, please don't hesitate to reach out. We are here to help!
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