The Corporate Transparency Act (CTA) of 2021 requires entities to report beneficial ownership information (BOI) to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) starting January 1, 2024, to enhance transparency and combat financial crimes. A beneficial owner is an individual who either directly or indirectly exercises substantial control over the reporting company or owns or controls at least 25% of the reporting company’s ownership interests.
Existing entities formed or registered prior to January 1, 2024, must submit their BOI report by January 1, 2025, while new entities formed or registered in 2024 must file within 90 days or 30 days if formed after December 31, 2024. Reporting includes BOI names, addresses, dates of birth, and unique identifying numbers from acceptable identification documents issued by a state or tribal jurisdiction (along with the image of such document).
Companies must also report their full name, trade name (DBA), address, state or tribal jurisdiction of formation and tax identification number (TIN). Foreign companies must include the state or tribal jurisdiction where they first registered in the U.S.
There are 23 entity types that are exempt from BOI reporting requirements, including publicly traded companies meeting specified requirements, many non-profit organizations, certain large operating companies and certain inactive companies. Detailed information on each exemption criterion is available in FinCEN’s Small Entity Compliance Guide.
Non-compliance can result in a daily fine of $591, up to $10,000, and two years in prison. Severe penalties also apply for filing false information. Companies may avoid penalties if they correct an error, mistake, or omission within 90 days.
Companies can complete BOI reports on FinCEN’s website. We are happy to answer your questions regarding CTA and BOI reporting and/or assist with BOI filings. Christine Fisher-Guyer, CPA provides more details on CTA and BOI reporting in Urgent Compliance Alert: 32 Million U.S. Entities Must File a BOI Report To Avoid Significant Penalties | Stephano Slack LLC. Feel free to contact your SS tax manager/partner at 610-687-1600.
By: Christine Fisher-Guyer, CPA, Partner
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