The Corporate Transparency Act (CTA) is upon us. It took effect on January 1, 2024, and imposes a new federal filing requirement for most corporations, partnerships, limited liability companies (LLCs), and other business entities.

Corporations, LLCs, and other entities subject to the CTA are called “reporting companies.” People who form new reporting companies must file a beneficial ownership information (BOI) report with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) within 90 days of forming the company. In addition, if there are changes in ownership, address, or name of business, the BOI must be updated within 30 days.

The owners of reporting companies created before 2024 must also file a BOI report, but they have until December 31, 2024. Some businesses are exempt from filing—for example, large operating companies with over 20 employees and $5 million in income.

The BOI report must contain the name, the birth date, the address, and an ID number and image of that ID for each “beneficial owner” of the reporting company. These are the human beings who (1) own or control at least 25 percent of the company or (2) exercise “substantial control” over the company.

Naturally, people have lots of questions about the BOI report filing requirements—for example:

• Do you have to file a BOI report if you own a single rental property in an LLC? (Yes.)

• Do you have to file 10 BOI reports if you own 10 LLCs? (Yes.)

• Can Certified Public Accountants file BOI reports for clients without running afoul of unauthorized practice of law rules? (Yes, varies by state)

• Are registered agents responsible for filing the BOI report? (No.)

• Do the self-employed have to file? (No.)

• Do I need to list a street address in the BOI report? (Yes.)

• Do I need to list my Social Security number in the BOI report? (No.)

• Must I file an updated BOI report if a beneficial owner leaves the company? (Yes.)

• Do I have to list my minor child in a BOI report? (No.)

Hefty fines of $500/day are being threatened for non-compliance. Make sure you don't overlook this!

If you need assistance filing your BOI report, reach out to either of us.

Sincerely,

Mark and Lee