What is the Corporate Transparency Act?
The Corporate Transparency Act (CTA), which was enacted in 2021, aims to combat illicit activity such as money laundering and tax fraud. New legislation brings a new reporting requirement to the CTA. As of January 1, 2024, businesses that meet certain criteria must file a Beneficial Ownership Information (BOI) report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
Who Does the Corporate Transparency Act Affect?
Any corporation, LLC, or other entity that is created by filings into a Secretary of State or similar office under state or tribal committee law is subject to this requirement, with a few exceptions. Companies created before January 1, 2024 will have until January 1, 2025 to file your BOI report. Companies created after January 1, 2024 have 90 days after creation to file.
CTA exemptions include:
- Securities reporting issuers
- Government authorities
- Banks
- Credit unions
- Depository institution holding companies
- Money services businesses
- Brokers or dealers in securities
- Securities exchanges or clearing agencies
- Other Exchange Act registered entities
- Investment companies or advisors
- Venture capital fund advisors
- Insurance companies
- State-licensed insurance producers
- Commodity Exchange Act registered entities
- Public accounting firms
- Public utility companies
- Financial market utilities
- Pooled investment vehicles
- Tax-exempt entities
- Entities assisting a tax-exempt organization
- Subsidiaries of certain exempt entities
- Inactive entities
- Large operating companies (more than 20 full time employees, located in the U.S. and more than $5 million in gross receipts)
How to File a Beneficial Ownership Information Report
How Often Do I Have to File a Beneficial Ownership Information Report?
Once you have filed your BOI report, you will only need to re-file when changes are made to the reported information. You will have 30 days to file the updated Beneficial Ownership Information report.
What Information Needs To Be Reported on a BOI?
Be sure to have the following information on-hand when you file your Beneficial Ownership Information report:
- Company Name and DBA names
- Principal place of business address
- Jurisdiction of formation
- Tax ID number
- For all individuals with substantial control over the entity or individuals with 25% or more ownership:
- Full name
- Date of birth
- Current address
- ID number form (drivers’ license, passport, or state ID)
- Picture of the document with ID number used
Where Do I File My BOI?
Reports are submitted online on the Financial Crimes Enforcement Network (FinCEN) website. There are no fees charged for the submission of your BOI reporting.
What If I Don’t File My BOI?
The U.S. Department of Treasury stated that anyone failing to report their Beneficial Ownership may be subject to civil or criminal penalties. While they may be more lenient for the time being, given that this is a new requirement, Boxelder strongly recommends filing this form as soon as possible.
Boxelder Accounting and Tax Relief
Have more questions about how this new legislation will affect your business? Talk to a Boxelder accountant today to learn more about the Corporate Transparency Act and take the first steps toward filing your BOI.
