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Action for Small Business Owners: Corporate Transparency Act

Action for Small Business Owners: Corporate Transparency Act

March 13, 2024

Friends, 

The Corporate Transparency Act (CTA) was enacted to limit illicit finance behavior by collecting more information on beneficial owners of companies. Starting January 1, 2024, the Financial Crimes Enforcement Network (FinCEN) began collecting personally identifying information and requiring some businesses to file the Beneficial Owner Information (BOI) report.

This will mainly impact those of you who own small businesses or entities. Here are a few facts related to this new regulation that might be helpful in determining the need to file as well as timing. 

  • What companies must file?
    • Corporations or LLCs that require filing with a secretary of state upon creation
    • LLP, LPs, LLLP also are expected to be included 
  • What people must be included in the report?
    • Beneficial owner
      • Any individual who, directly or indirectly, either exercises substantial control over a reporting company
      • Or owns or controls at least 25 percent of the reporting company’s ownership interests 
  • Are there exemptions?
    • A company with more than 20 full time employees, and filed a tax return with more than $5 million in gross receipts and has a physical presence in the US
    • There are 23 other exemptions for specific types of companies like tax-exempt entities, banks and other financial institutions 
  • What is the timing?
    • If your company was registered prior to 1/1/2024 – you have until 1/1/2025 to file. Filing can be done here
    • If the company if formed in 2024 – report should be filed within 90 days of formation

We wanted to make sure our clients and friends were aware of this Act to ensure compliance. Also, we suggest you speak with your attorney to determine which entities should file the BOI report as it can get quite complex if subsidiaries and other affiliates are involved. Other information can be found in the press release below.

 

Matt and Andrew


US Department of Treasury Press Release´╗┐