Important Information for Businesses Regarding the Corporate Transparency Act

As you may be aware, the Corporate Transparency Act (CTA) became effective as of January 1, 2024.  Under this new law, many small businesses must report Beneficiary Ownership Interest (BOI) information to the Financial Crimes Enforcement Network (FINCEN).  This entails a requirement that “reporting companies” submit a report each year disclosing all beneficial owners of that company.  A beneficial owner is defined as any individual that directly or indirectly exercises substantial control over the reporting company.  This could include officers, owners, or other decision makers for the company.

These reporting rules apply to any business that is created by the filing of a document with a Secretary of State or similar office.  This would typically include any Corporations, S Corporations or LLCs (including single member disregarded LLCs).  While there are some exemptions to these reporting requirements, these exemptions are limited and we believe many of our business clients will have a filing requirement.

For entities created prior to 2024, the first filing is due by January 1, 2025.  Companies that were created or registered in 2024 should file their initial reports within 90 days of their creation.

While many businesses may be able to prepare this filing on their own, due to the complex nature of these filings and determining the necessary beneficial owners to report, we would advise you to contact your legal counsel for assistance in filing these initial reports.  Specifically, we would advise you to consult your legal counsel to ensure that you are including all necessary beneficial owners in the filing.

If you have further questions on these new rules, you can find additional details and FAQs at this website https://www.fincen.gov/boi-faqs#B_1