As you may have seen, the Corporate Transparency Act (CTA) has introduced new requirements in reporting Business Ownership Information (BOI). I wanted to review the changes with you and help you navigate these new rules.
What is the Corporate Transparency Act?
This was an act that went into effect in 2021 and was designed to prevent illegal financial acts such as money laundering, tax fraud, and more. The CTA requires businesses to report specific information regarding their ownership and/or individuals within their company.
While many businesses are excluded, small businesses in particular may struggle to comply with these regulations.
Who Needs to File?
Any corporation, LLC, limited partnership, or similar entity created by filing a document with any U.S. state, territory, or Indian Tribe (domestic reporting companies).
OR
Any non-U.S. entity that registers to do business in any U.S. state, territory, or tribe (foreign reporting companies).
Who is Considered a Beneficial Owner?
A beneficial owner is someone who is considered to have a significant ownership interest in a company. This could be directly or indirectly through being a major decision maker for the business, owning 25% or more of the company’s shares, or a similar level of control in the company’s equity.
What is a FinCEN Identifier?
This is your unique identifying number that FinCEN will issue to an individual or reporting entity after you provide necessary information. An individual or reporting company may only receive ONE FinCEN identifier.
You will need the following to create your FinCEN ID:
Email Address (Look out for confirmation from FinCEN)
2-Step Authentication
Driver’s License or Other Form of identification will need uploaded
Full instructions for the process can be found here: FinCEN Instructions
What are the Penalties for Non-Compliance?
We are sharing these regulations with you today because it is crucial that you comply. Companies that fail to report, fail to update their BOI, or give false information can face criminal charges. Penalties can include $591 per day or up to 2 days in prison.
What Needs to Be Done?
If you are an existing reporting company, you have until January 1, 2025 to file your initial report with FinCEN.
Companies formed following January 1, 2025 must file their report within 30 days.
Companies created or registered in 2024 will receive a 90 day window from the date effective of their initial reports and must identify two “Company Applicants”.
If you feel that your company fits these stipulations, please fill out the following form & acknowledge the engagement letter here:
FinCEN ID
We want to assure you that you are not alone in understanding these new requirements, our team is dedicated to supporting you through this transition. Please note that there will be an additional charge of $250 per BOI filing per beneficial owner.
In order for our team to start the BOI Reporting process we must have a signed engagement letter, FinCEN ID, and the BOI reporting form filled out.
If you have any questions, please reach out to Bethany Milhoan at [email protected] to get started.