The Corporate Transparency Act (CTA) mandates that certain businesses report their Beneficial Ownership Information (BOIR) to the Financial Crimes Enforcement Network (FinCEN). This regulation is designed to increase transparency in corporate ownership and assist in the fight against financial crimes, including money laundering and tax evasion. As a business owner, it is essential to understand the requirements and deadlines for compliance.
1. Entities Required to File BOIR
Domestic & Foreign Entities: LLCs, corporations, and similar entities formed or doing business in the U.S.
Exempt Entities: Large operating companies with over 20 full-time employees, more than $5 million in annual revenue, and a physical presence in the U.S., as well as regulated financial institutions and inactive entities.
2. Required Information to Report:
Beneficial Owners: Individuals who own or control at least 25% of the entity or have substantial control (e.g., through a leadership role or voting power).
Required Details:
Full legal name
Date of birth
Address (residential or business)
Unique identification number (e.g., passport or driver’s license)
Nature of ownership or control over the entity
3. Filing Deadlines:
New Entities: Must file their beneficial ownership information at the time of formation or registration with FinCEN.
Existing Entities: Must file by January 13, 2025.
Updates: Any changes in beneficial ownership must be reported within 30 days of the change.
4. Penalties for Non-Compliance:
Civil Penalties: Failure to report or update information can result in penalties of up to $500 per day.
Criminal Penalties: Willfully providing false or misleading information can lead to fines up to $10,000.
5. Submission Process:
Reports must be submitted electronically through FinCEN's secure online portal.
Information will be stored in a private, non-public database, accessible only to authorized government agencies.
6. Purpose of the Filing:
Transparency: Ensures that law enforcement and regulatory agencies can identify the true owners and controllers of entities.
Anti-Money Laundering (AML): Helps prevent financial crimes such as money laundering and terrorism financing by providing greater visibility into business ownership structures.
Action Required:
If your business meets the filing requirements, ensure that the necessary information is reported by the January 13, 2025 deadline to avoid potential penalties. Take the time to review and update your ownership details, and make sure that you are compliant with these important regulatory changes.
For more information on BOIR and the CTA, visit the FinCEN website or consult with a professional advisor.
Comments