Key Points
- If your business is registered with state as a partnership, LLC, corporation, or other entity you may be impacted by a new law called the Corporate Transparency Act (CTA) that has Beneficial Ownership reporting requirements.
- Exempt businesses include those with at least 20 full time employees, federally regulated businesses, and sole proprietors who are NOT registered with the State. It is unclear at this point whether trade names will qualify a sole proprietor for reporting.
- The CTA requires businesses to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN), an agency within the U.S. Treasury Department.
- The business will be required to submit an electronic form that includes the following information:
- A name, address, birth date, and a unique ID number for each beneficial owner (a driver’s license number or passport number)
- A name, address, registered agent, and tax ID number for the business
- Type of BOI filing (initial filing, correction, or update)
- For newly created businesses, information about company applicants (more on this in the next section)
- FinCEN beneficial ownership information will only be available to authorized law enforcement agencies and financial institutions.
- Due Dates:
- For businesses registered prior to January 1, 2024, the report is due by January 1, 2025.
- For businesses created on or after January 1, 2024, the report will be due within 30 days from the time the business receives notice that its registration is approved by the state.
- Additional reports are required only when there is a change to the information provided, such as a change in ownership or correcting an error.
- Penalties:
- There are penalties for failure to comply and providing false information of $500 per day ($10,000 max) and up to 2 years in prison.
- The penalty for anyone with access to this information disclosing it without proper authorization is a fine of $500 per day up to $25,000 and up to 5 years in prison.
- The reporting portal is expected to be ready to accept reports on January 1, 2024.