The Corporate Transparency Act

The Corporate Transparency Act (CTA) went into effect on January 1, 2024, and is a law that requires businesses that do not meet certain exemptions to file their Beneficial Ownership Information (BOI) report with FinCEN.  Every small business owner needs to know about this new reporting requirement as non-compliance can result in severe penalties.  This requirement is intended to be very broad and most small businesses in the US are expected to have a filing requirement.

Who is a reporting company?

Reporting companies are generally LLCs, S Corporations, C Corporations, or similar entities that are created or registered in the US or in a foreign country.

Exemptions

There are many exemptions for companies that are already subject to federal or state regulation. Here are some exemptions from the reporting period, including (but not limited to):

- Large operating companies which meet all three of the following:

• Have more than 20 full-time employees
• More than $5 Million in gross receipts or sales, and
• Have an operating presence at a physical office within the US

- Publicly traded companies, banks, credit unions, securities brokers

- Tax-exempt entities

- Insurance companies, public utilities, and accounting firms

When To File

Reporting companies must file a report with the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Department of the Treasury, that includes the name, date of birth, address, and unique identifying number of each beneficial owner of the company.  

Reports will be accepted starting on January 1, 2024, 

• If your company was created or registered before January 1, 2024, you will have until January 1, 2025 to file the initial report
• If your company was created or registered on or after January 1, 2024, and before January 1, 2025, you must file the report within 90 days after receiving actual or public notice of the registration
• If your company was created or registered on or after January 1, 2025, you must file within 30 days after receiving actual or public notice of the registration.
• Any updates or corrections to beneficial ownership information must be submitted within 30 days of the change.

Where to file

The report should be filed online: https://www.fincen.gov/boi

Failure to comply with the law or providing false or fraudulent information may result in civil and criminal penalties, including fines and imprisonment.

Though the information necessary to comply with the CTA requirements may overlap with information that we request from you in satisfaction of your income tax and other compliance requirements, the CTA reporting requirements fall outside the scope of tax compliance and other permissible services that A&A can provide.  As a result, A&A is restricted from assisting or advising you regarding these new rules. These reporting requirements are complex and A&A encourages you to consult with your attorney to ensure that you are in compliance with these new requirements.