There is a new reporting requirement, known as Beneficial Ownership Information (BOI), which came into effect in 2024.
In the article below, you will find general information regarding the new reporting rules as well as initial steps you should take to address the implications of the Corporate Transparency Act (CTA) to your organization.
- Your business ownership structure can be complicated and you should contact your attorney with any questions regarding this filing requirement. If you have other questions please don’t hesitate to contact us.
Who This Applies To: This reporting requirement applies to corporations, LLCs and any other entities that were created by filing with the secretary of state or similar office.
When You Will Need to File This Report: For applicable entities created prior to 1/1/2024, the filing is to be completed by 1/1/2025 and is mandatory for most corporations (S corp or C corp) and limited liability companies (LLC) unless your business qualifies for any exemptions. You can find the list of exemptions at this link.
- For applicable entities created after 12/31/2023, the filing must be completed within 90 days of forming the entity.
- For applicable entities created after 12/31/2024, the filing must be completed within 30 days of forming the entity.
- The report will also need to be updated whenever any of the information provided on the original filing changes. This would include a new address, name change, updated driver’s license, etc.
What Happens If You Don’t File:
- A person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. That person may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000.
- Both individuals and corporate entities can be held liable for willful violations.
How Can The Report Be Filed:
- As the CTA is not a part of the tax code, the assessment and application of many of the requirements set forth in the regulations, including but not limited to the determination of beneficial ownership interest, necessitate the need for legal guidance and direction. As such, since we are not attorneys, our firm is not able to provide you with any legal determination as to whether an exemption applies to the nature of your entity or whether legal relationships constitute beneficial ownership. For this reason, our firm will not be able to file the reports on our client’s behalf or advise on how they should be completed.
- We recommend reaching out to your business attorney to assist with advising and potentially filing on your behalf.
- If your attorney is unable to assist or you have a relatively simple structure and do not require advice, you can file through the Financial Crimes Enforcement Network (FINCEN) website at this link. There is no fee to submit the report through FINCEN if you are comfortable filing it yourself.
- There are also multiple businesses that have been created specifically to assist with advising and filing these reports.
Learn more about BOI reporting using this link. While our ability to assist is limited, please feel free to reach out if you have any general questions or concerns. We are always here to assist and inform you of the accounting industry changes that impact your business.