On January 1, 2024, a new reporting requirement went into effect that requires millions of small businesses to file a Beneficial Ownership Information (BOI) Report with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
Congress imposed this requirement in a statute called the Corporate Transparency Act (CTA), with FinCEN issuing the regulation providing the details on who must file a report, when it needs to be filed, and what information needs to be reported.
What is the purpose of the Corporate Transparency Act?
The CTA is primarily an anti-money laundering law. In it, Congress states that bad actors seek to conceal their ownership of corporations, LLCs, or similar entities in the United States to facilitate money laundering, financing of terrorism, tax fraud, and other illegal acts.
What kind of information must be reported by domestic reporting companies?
A domestic reporting company created before January 1, 2024, must provide information about the company and about its beneficial owners. A domestic reporting company created on or after January 1, 2024, must provide information about the company, its beneficial owners, and its company applicants.
A domestic reporting company created before January 1, 2024, must file its initial BOI report by January 1, 2025. A domestic reporting company created on or after January 1, 2024, and before January 1, 2025, must file a report within 90 calendar days of the date on which it receives actual or public notice that its creation has become effective. A domestic reporting company created on or after January 1, 2025, must file a report within 30 calendar days of the date on which it receives actual or public notice that its creation has become effective.
If there is any change in the information reported about the reporting company or its beneficial owners, the reporting company must file an updated report within 30 calendar days after the date on which the change occurs.
Who is a “beneficial owner”?
A beneficial owner is an individual who, directly or indirectly, either exercises substantial control over the reporting company or owns or controls at least 25 percent of its ownership interests.
Who is a “company applicant”?
A company applicant is the individual who directly files the document that creates the domestic reporting company and the individual who is primarily responsible for directing or controlling the filing if more than one individual is involved in the filing of the document.
Need Help?
For companies with two or fewer owners, Kreisher Marshall & Associates is offering our services on a flat-fee basis of $300.00, which will include an initial consultation, our determination of your reporting obligations and assistance with making any required filings. If you have multiple companies, or more than two owners for a single business entity, please contact us to schedule a consultation.
