The Corporate Transparency Act (CTA) enacted on January 1, 2021 aims to enhance anti-money laundering efforts by requiring certain businesses to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) starting in 2024. This new requirement aims to prevent the use of shell companies for illicit activities and provide national security and law enforcement agencies with a useful database of company ownership.

Who Must File:
The CTA applies to domestic and foreign companies registered with a state authority (such as a Secretary of State office). This includes corporations, LLCs, and other entities formed through state filings. If your company is registered or formed in the U.S., you will likely be required to comply with these reporting requirements.

So, you must register if you own a C-corp, S-corp, or LLC. If you hold investment properties in various LLCs, you must register them.

What Information Must Be Reported:
You must submit information about the company’s “beneficial owners” and, for entities formed after 2023, the company’s “applicants.” Beneficial ownership information (BOI) includes:

• Full legal name
• Date of birth
• Current address
• A unique identification number (e.g., from a non-expired U.S. passport, state driver’s license, or other government-issued ID).

For companies formed after 2023, the BOI report must also include information about the individuals who formed or registered the company (the “company applicants”).

Who Counts as a Beneficial Owner:
A “beneficial owner” is anyone with significant control over a company, including senior officers (e.g., CEO, CFO, general counsel), and individuals with the power to appoint or remove these officers or board members. Notably, these individuals don’t need to have ownership in the company to be considered beneficial owners for reporting purposes.

FinCEN Identifiers:
Individuals and companies can request a unique FinCEN ID number to protect privacy. This number can be used in place of supplying detailed personal information in subsequent filings, making it easier for individuals involved in multiple companies to comply with the law without repeating the process each time.

Important Filing Dates:

• Existing companies (formed before 2024) must file their initial BOI report by January 1, 2025.
• Companies formed in 2024 must file within 90 days of formation or registration.
• Companies formed after 2024 must file within 30 days.

Penalties for Noncompliance:
Failure to file the required reports or filing incorrect information can result in severe penalties, including fines of up to $500 per day, with a maximum fine of $10,000. Additionally, individuals who willfully fail to comply could face up to 2 years in prison.

How to File:
The BOI report must be filed electronically through FinCEN’s e-filing portal: https://boiefiling.fincen.gov. You can submit the form directly online or upload a completed PDF of the report. There is no filing fee if you submit the report yourself.

We encourage you to review these new requirements and take the necessary steps to ensure your business complies with the CTA. Please note that we, unfortunately, will not be able to assist you with this filing directly. We strongly encourage you to consult your legal advisors for specific guidance on how the CTA applies to your business.