Corporate Transparency Act and Beneficial Ownership Reporting
Summary:
Most businesses are required to file.
The filing is due now.
You can file on your own at the FinCEN website.
If you need assistance with your filing, we have partnered with FileForms.com.
What is The CTA?
The Corporate Transparency Act (CTA) requires businesses to submit Beneficial Ownership Information (BOI) reports to the U.S. Department of the Treasury detailing ownership and control of companies.
Why Was the CTA Enacted?
The CTA was introduced to combat financial crimes such as money laundering, terrorism financing, and tax evasion by increasing transparency about individuals who own or control companies in the United States.
What Is a BOI Report?
A BOI report provides details about the reporting company, including the legal name, mailing address, and employer identification number (EIN). Additionally, it requires disclosure of key information about its beneficial owners, such as their name, date of birth, address, and a unique identifying number (e.g., from a driver’s license, passport, or state-issued ID).
When Are BOI Reports Due?
For entities formed in 2024: You must file within 90 days of the company's creation.
For entities formed in 2025 or later: You have 30 days from the entity's creation date.
For companies existing before 2024: The filing deadline is January 1, 2025.
If you're late with your filing, submit it as soon as possible to minimize penalties. While penalties exist for late filing, given that this is the first year of the program, leniency may be expected.
Who Prepares and Files the BOI Report?
The AICPA has advised against CPAs providing client-specific advice or preparing this report, as it falls outside the scope of our services.
You can file the BOI report yourself by visiting the FinCEN website.
Need Help Filing?
Our firm has successfully worked with FileForms.com. If you need assistance in meeting the BOI filing requirement, we recommend visiting their website.
What Happens If I Don’t File?
Failure to file may result in severe penalties, including civil fines of $591 per day and criminal penalties of up to two years imprisonment, along with fines of up to $10,000.
How Often Are BOI Reports Filed?
BOI reports do not expire, so there is no annual filing requirement. However, if any information on the BOI report changes, the company must submit updates within 30 days. Failure to update the report can result in the same penalties listed above.
What Qualifies as a Reportable Change?
Examples of reportable changes include updates to a company's name, DBA (Doing Business As), address, or changes to the name, address, or unique identifying number (e.g., driver’s license or passport) of a beneficial owner.
Do I Have to File?
Most businesses are required to file, although there are some exemptions. Organizations subject to significant regulation may be exempt from BOI reporting, these include: Publicly traded companies, financial services organizations, tax-exempt organizations, accounting firms, large operating companies that meet specific criteria. Details on who is required to file can be found on the FinCEN Website.
I Heard BOI Reports Were Ruled Unconstitutional, So Why Is the Law Still in Effect?
On March 1, 2024, a federal court in Alabama ruled that the reporting requirements established by the CTA were unconstitutional in National Small Business United v. Yellen. While it may seem that all BOI reporting was deemed unconstitutional, the ruling applies only to the plaintiffs in this specific case.
As of now, the CTA remains in effect.
Our Disclaimer:
The information provided on this page is for general informational purposes only and does not constitute legal or professional advice. While we strive to keep the information up to date and correct, we make no representations or warranties, express or implied, about the information's accuracy, completeness, or suitability. Any reliance you place on such information is strictly at your own risk. For specific advice tailored to your situation, please consult a qualified professional. Our firm may receive compensation for referrals to third-party services mentioned on our website. By filing on your own or using FileForms.com, you agree to indemnify and hold harmless our firm, its owners, and its employees from any liability.
The most current CTA and BOI requirement information can only be found on the FinCEN Website.