Business Entity created before Jan, 2024? You have work to do!
Did you know there was a new regulation that required all current businesses, with very few exceptions, to register with FinCEN? This law is called the The Coporate Transparency Act or the CTA. The CTA is an effort to detect and prevent misconduct through the formation of business entities. Think Money Laundering! It requires certain companies to report Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). As business organizational setup (LLCs and Corporations) is governed by individual states, it was generally thought a clearinghouse for information was needed. States have different requirements for the disclosure of the owners of the business, therefore one streamlined online submission was created. Generally speaking, the CTA requires most existing and newly registered entities in the United States to file reports with the federal government regarding their beneficial owners. These reports will be filed with FinCEN and required compliance began January 1, 2024.
A Beneficial Owner is someone who exercises substantial (directly or indirectly) control over the company and has at least 25% of the ownership in that company. Domestic Companies created or registered to do business in the U.S. before January 1, 2024, will have until January 1, 2025 to file their report. Companies created after January 1, 2024 must file an initial report within 90 calendar days of approval notice. After January 1. 2025, domestic companies will have 30 days to file the BOI report with FinCEN.
There are some exemptions to this reporting requirements, however, generally speaking, these are very narrow. A full list of these 23 exempted categories may be found at https://www.fincen.gov/boi-faqs#C_2.
Get started with your filing here: https://boiefiling.fincen.gov/.
There are multiple penalties, civil and criminal, for noncompliance with the CTA. If you have questions on whether this applies to you, who are beneficial owners, or how to submit the form, please schedule a consultation with our office at https://www.gustafsonlawgroup.com/.
