The Corporate Transparency Act (CTA), enacted by Congress, requires certain entities to report Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). This is a critical step to prevent illegal activities such as money laundering, fraud, and tax evasion. Understanding who must report and what needs to be filed is essential for businesses to remain compliant with the law.
Who Needs to Report?
Under the CTA, reporting companies are required to disclose their beneficial owners. A reporting company is typically a corporation, limited liability company (LLC), or other similar entity created by filing a document with a Secretary of State or equivalent office. Exceptions exist for larger entities such as publicly traded companies and certain regulated entities, but most small and medium-sized businesses must report.
What Information Must Be Reported?
Each reporting company must disclose the following BOI to FinCEN:
1. Full legal name of the beneficial owner.
2. Date of birth.
3. Residential or business address.
4. Unique identifying number from an acceptable identification document such as a passport, driver’s license, or a FinCEN-issued identifier.
When Is Reporting Required?
The timeline for reporting depends on whether the company is newly formed or an existing one:
New companies: Must submit the BOI report within 30 days of formation.
Existing companies: Have until January 1, 2025, to comply with the reporting requirements.
Penalties for Non-Compliance
Failure to file the required BOI report can lead to severe consequences. Non-compliance may result in civil penalties of up to $500 per day and criminal fines of up to $10,000 or imprisonment for up to two years.
Conclusion
As businesses navigate the intricacies of the CTA, timely and accurate BOI reporting is essential. By ensuring compliance, companies can avoid hefty fines and legal consequences while contributing to transparency in the financial system.
For more information and assistance on filing your Beneficial Ownership Information Report, visit BOIFinCEN Reporting’s official website.
