Be Aware of New Reporting Requirement OR Face up to a $10,000 Fine!

Yes, it’s true.

Effective January 1^st, 2024, many companies in the U.S. will be required to report information about their beneficial owners (individuals who ultimately own or control the company). This information is reported to the Financial Crimes Enforcement Network (FinCEN), which is   bureau under the US Department of Treasury. It is an initial implementation of the Corporate Transparency Act (CTA).

The filing is free, so be wary of third parties offering to complete the Beneficial Ownership Information (BOI) for a fee. The BOI report requires the company to identify itself and provide information about each beneficial owner, such as name, birthdate, address, unique identifying number and issuing jurisdiction, and the image of the id document. Businesses created after January 1, 2024, must also provide this information for the applicant.

You may need to report if your company is a corporation, limited liability company (LLC), limited liability partnership, limited liability limited partnerships, business trusts, an otherwise created in the US by filing registration documents with the secretary of state or any similar office in the state or Indian tribe. A foreign company that has registered to do business in any US State or Indian tribe may also have to file.

Twenty-three entities are exempt from the reporting requirement. Publicly traded companies meeting specific requirements, non-profits and large operating companies in the following areas.

EXEMPT BUSINESSES:
Securities reporting issuer
Governmental authority
Bank
Credit Union
Depository institution holding company
Money services business
Broker or dealer in securities
Securities exchange or clearing agency
Other exchange Act registered entity
Investment company or investment advisor
Venture capital fund adviser
Insurance company
State-licensed insurance producer
Commodity Exchange Act registered entity
Accounting firm
Public utility
Financial market utility
Tax-exempt entity
Pooled investment vehicle
Entity assisting a tax-exempt entity
Large operating company
Subsidiary of certain exempt entities
Inactive entity

There are both criminal and civil penalties for missing a filing deadline. Penalties start at $500 per day up to $10,000, and imprisonment up to two years for willful failure to file a timely initial or updated report. Therefore, it is important for business owners who are not on the exempt list above know when they must file.

• A company created for registered before January 1, 2024, has until January 1, 2025, to report BOI.
• A company created after January 1, 2024, and before January 1, 2025, has 90 days to complete the BOI filing.
• A company created after January 1, 2025, has only 30 days from the date of creation to report BOI.

• Changes to your beneficial owners must be reported within 30 days of the day the change occurred.

It is the owner’s exclusive responsibility to comply with the Corporate Transparency Act (CTA), including the beneficial ownership information (BOI). You can learn more about the BOI at https://fincen.gov/boi. To complete the report go to: https://boiefiling.fincen.gov and look for the “File BOIR” button. Please consult with legal counsel on additional questions or concerns regarding the BOI reporting requirements.