The Corporate Transparency Act went into effect in January 2024 and may require your business to report information about your company’s ownership to the government. Understanding the intricacies of the act and its potential implications is crucial for your business.
Note: Please be aware that the information regarding the Corporate Transparency Act may be subject to change as the logistics evolve. We will do our best to maintain the accuracy of this page with the most up-to-date information available. Should you have any questions or concerns, please do not hesitate to reach out to us.
What is the Corporate Transparency Act?
The Corporate Transparency Act (CTA) aims to combat illicit activity including tax fraud, money laundering, and financing for terrorism by capturing more ownership information for specific U.S. businesses operating in or accessing the country’s market. Under the new legislation, businesses that meet certain criteria must submit a Beneficial Ownership Information (BOI) Report to the Financial Crimes Enforcement Network (FinCEN).
What is Required in a Beneficial Ownership Information Report?
The submission of Beneficial Ownership Information (BOI) reports is a registration and not an annual requirement, however, ownership changes must be updated within 30 calendar days of the event. Companies subject to reporting must provide essential information about each beneficial owner such as their name, date of birth, address, and identification number and image of either a driver’s license, passport, or another form of valid identification.
Who is Required to File?
The entities required to submit BOI reports include corporations, limited liability companies (LLCs), or entities formed in the U.S. by filing with a state or tribal office. Additionally, foreign companies registered to conduct business in any U.S. state or Indian tribe fall under this requirement. Certain entities, including publicly traded companies, nonprofits, and specific large operating companies, are exempt from the reporting obligations.
Deadlines to File
Companies that are required to comply must file their BOI report by the following deadlines:
- Reporting companies formed or registered to conduct business in the United States before January 1, 2024, must file by January 1, 2025.
- Changes to beneficial ownership, changes to previously reported information, deceased beneficial owner, correct inaccurate information or update identifying document images must be reported within 30 calendar days after the change occurs.
Newly created or registered companies:
- Reporting companies formed or registered to conduct business in the United States during 2024, have 90 calendar days to file after receiving notice that their company’s creation or registration is effective.
- Reporting companies formed or registered to conduct business in the United States on or after January 1, 2025, have 30 days to file after receiving notice that their company’s creation or registration is effective.
Penalties for Non-Compliance
The Corporate Transparency Act (CTA) imposes both civil and criminal penalties for intentional violations, which include: (1) failure to report or update a reporting company’s BOI, and (2) providing false or fraudulent BOI. Civil penalties involve a daily fine of $591 for a continuing violation, capped at a maximum of $10,000. Criminal penalties can result in imprisonment for up to two years. The CTA does not include provisions for non-willful or negligence penalties.
Please contact us if you have any questions or require further information. We are here to assist you in navigating the reporting process.