This is an important alert for those who own or control business entities.
The new Corporate Transparency Act (“CTA”) went into effect January 1, 2024, and requires certain business entities to file an information report with the Financial Crimes Enforcement Network (“FinCEN”). The CTA imposes these reporting requirements on legal entities that are formed by a filing with the Secretary of State. The reporting entities include corporations, limited liability companies, and limited partnerships.
Aimed at exposing money laundering, the CTA requires entities to submit information about their owners and any other individuals who have substantial control of the entity, in a report called a Beneficial Ownership Information Report (“BOI Report”). These reports will be maintained by FinCEN and will not be publicly available. For each beneficial owner, the reporting entity must provide a copy of their official identification card, and provide the owner’s name, date of birth and residential address. Similar information must be provided about the entity as well. Note the following deadlines:
- Entities formed in 2024 must file their initial BOI Reports within 90 calendar days of formation.
- Entities formed before January 1, 2024 must submit their initial BOI Report by December 31, 2024.
- Entities formed after 2024 must file their initial BOI Reports within 30 calendar days of formation.
There are some notable exceptions. Entities formed without a Secretary of State filing, such as Texas general partnerships, are exempt, as are Texas trusts and tax-exempt entities. Legal entities with at least 20 full-time employees in the US and at least $5 million in gross receipts are generally exempt as well.
Failure to file by the deadline may result in civil penalties of $500 for each day past the due date. In some cases, criminal prosecution could result in a fine of up to $10,000 and/or imprisonment of up to 2 years.
Here are some helpful links for more information and for assistance in getting your BOI Report filed:
You can file your BOI Report directly with the Financial Crimes Enforcement Network here:
If you prefer the assistance of a commercial service to file for you, consider the following:
While Farner & Perrin, L.L.P., will not be undertaking to file the BOI Reports for clients, our attorneys are available for any further guidance you may request. We encourage you to stay in compliance and file your BOI Report sooner rather than later.