Attention Business Owners:
This post is to inform of the implementation of the Corporate Transparency Act of 2021.
Starting January 1, 2024, every business entity that was created through a state filing service in the United States will be required to report beneficial ownership information to the U.S. Department of the Treasury’s Financial Crime Enforcement Network (FinCEN). Failure to file may result in up to two years in prison and a fine of $10,000. Exceptions are limited.
Beneficial owners are individuals who directly or indirectly exercise substantial control over the company, or who owns or controls 25% or more of the company. Substantial control is broadly defined to include senior officers, those who have the ability to appoint or remove senior officers, or a majority of the board of directors, those who have substantial influence over important decisions, and those who have any other form of substantial control over the company.
The requirements for the report will be as follows:
1. The entity’s legal name and trade names including D/B/A’s;
2. The address of the business;
3. The jurisdiction in which it was formed or first registered; and
4. The business’ Taxpayer Identification Number (TIN).
Additionally, each beneficial owner within each company will need to provide in the report:
1. The beneficial owner’s legal name;
2. The beneficial owner’s date of birth;
3. The beneficial owner’s address; and
4. The beneficial owner’s identifying number – such as a driver’s license, passport, or other approved document – as well as an image of the document that the number is from.
All businesses that have been created or registered before January 1, 2024 must file by January 1, 2025. Companies created or registered after December 31, 2023 must file within 30 calendar days of formation. Reports will be accepted for filing beginning January 1, 2024.
Additionally, any updates or changes within the company will require the company to file a report of changes within 30 days of the change occurring. If there are any inaccuracies within a filed report, a company will have 30 days to report such an inaccuracy. There are no safe harbor provisions for filing an incorrect report.
Please contact our office with any questions regarding the new filing requirements or visit https://www.fincen.gov/boi.
