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The Corporate Transparency Act (CTA) has ushered in a new era of financial clarity for businesses in the United States. As part of this legislation, the Financial Crimes Enforcement Network (FinCEN) has implemented a Beneficial Ownership Information (BOI) reporting system. Like anything new or unknown to businesses owners, this may appear as a challenging task. In most cases, filing only takes a small amount of time, especially if supported by a professional. Below, learn the essential aspects of this new requirement to prepare your business for compliance.
Beneficial Ownership Information reporting is a new federal requirement designed to enhance transparency and reduce financial crimes. It requires certain companies to disclose information about their beneficial owners – individuals who own or control the company.
The BOI reporting requirement applies to “reporting companies,” which generally includes corporations, limited liability companies (LLCs), and other similar entities created or registered to do business in the U.S. by filing with their local secretary of state or a similar office.
However, some entities are exempt from this requirement, such as certain large public companies and tax-exempt organizations. (Learn more HERE.)
The deadlines for filing BOI reports vary depending on when your company was created or registered:
– Companies created or registered before January 1, 2024: file by March 21, 2025.
– Companies created or registered in 2024: file within 90 calendar days of receiving notice of effective creation or registration.
– Companies created or registered on or after January 1, 2025: file within 30 calendar days of receiving notice of effective creation or registration.
Reporting companies must provide FinCEN with:
Company information:
– Legal name and any d/b/a (“doing business as”) names
– Address
– Jurisdiction of formation
– Taxpayer identification number
Beneficial owner information:
– Name
– Date of birth
– Address
– Identifying document information (e.g. – driver’s license number or passport number)
BOI reports must be filed electronically through FinCEN’s secure online filing system, which is available on their website. Importantly, this filing is free of charge.
FinCEN has reinforced their commitment to helping small businesses understand and comply with these new requirements. They have provided a comprehensive Small Entity Compliance Guide and other educational materials on their website. Additionally, FinCEN regularly updates their FAQ page to address specific questions about BOI reporting.
Again, this new BOI reporting requirement may appear as a significant change for many small businesses. While it may seem daunting, proper preparation and understanding of the requirements can ensure smooth compliance. It is important to stay informed about updates or changes to the reporting process. Do not hesitate to seek professional advice from an attorney or CPA if you have any questions.
As we move forward with this new era of financial transparency, it is crucial for business owners to familiarize themselves with these requirements and prepare for timely compliance. By doing so, you will not only avoid potential penalties but also contribute to a more transparent and secure financial system.
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