Corporate Transparency Act Compliance – Beneficial Ownership Information

As you may have heard, in 2021, Congress passed the Corporate Transparency Act (CTA) on a bipartisan basis. This law creates a new requirement to file a beneficial ownership information report  (BOIR) as part of the U.S. government’s efforts to make it more difficult for “bad actors” to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.

On January 1, 2024 the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, launched the BOI E-Filing System website for reporting companies to submit their BOIRs online.  At a high level, the CTA requires the filing of reports with FinCEN disclosing ultimate beneficial owners, control persons and certain other individuals of in-scope entities.  While there are several categories of exemptions (mostly for highly regulated entities) many entities will need to file, including inactive entities formed after January 2, 2020.

IF YOUR COMPANY STRUCTURE ISN’T COMPLICATED, REPORTING IS QUICK AND EASY!

1. If your company was created or registered to do business before January 1, 2024, you will have until January 1, 2025, to file your BOI report. (If your company was formed in 2024, you have 90 days from the date of formation to file your BOI report.)
2. Access the form online and file here.
3. There is no fee for submitting your beneficial ownership information report to FinCEN.
4. There is no annual reporting requirement. However, if there is any change to the required information about a reporting company or its beneficial owners, the reporting company must file an updated BOIR no later than 30 days after the date on which the change occurs. Examples of changes that would require an updated BOI report are found here on page 45.
5. For additional information and step-by-step instructions, visit the BOI reporting help desk.

In closing, it’s important to note, as specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. That person may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.

We strongly encourage you to visit the BOI E-Filing System website today and file your report prior to the January 1, 2025 deadline.

YOU ARE NOT ALONE!

If you have questions regarding the applicability of the CTA to your entities, whether any entity is exempt from the CTA, or how to determine who are the beneficial owners of your entity, please contact your usual ISPP attorney or paralegal, or info@irelandstapleton.com to discuss possible engagement with our firm.

Ireland Stapleton WILL NOT make these filings or updates unless you engage us to do so.

FinCEN has been notified of recent fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act. The fraudulent correspondence may be titled “Important Compliance Notice” and asks the recipient to click on a URL or to scan a QR code. Those e-mails or letters are fraudulent. FinCEN does not send unsolicited requests. Please do not respond to these fraudulent messages or click on any links or scan any QR codes within them.