Corporate Transparency Act: Information and Deadlines Regarding BOI Reporting

Authors:

• Maclain Joyce
• Matthew Sullivan
• Rachel Farr
• Alyson Jaen
• Austin Gemmell
• Lindsey Pho
• Ben Asser
• Jack Hakim

Did you create or register a company in the United States this year or prior to January 1, 2024, and still have not filed your MANDATORY* Beneficial Ownership Information Report (BOIR) with FinCEN? If so, you may have a federal filing deadline quickly approaching.

If you have any questions or concerns about the process, or about whether or not you are required to file, please contact Messner Reeves LLP.

Below, you will find additional information about the Corporate Transparency Act, reporting requirements, and deadlines for filing.

Filing Deadlines

• Reporting companies created or registered before January 1, 2024, have until January 1, 2025 to file.
• Reporting companies created or registered in 2024 must file within 90 calendar days after receiving actual or public notice that their creation or registration is effective, whichever is earlier.
• Reporting companies created or registered on or after January 1, 2025 must file within 30 calendar days after receiving actual or public notice that their creation or registration is effective.
• Any updates or corrections to beneficial ownership information previously filed with FinCEN must be submitted within 30 days.

Companies can file at https://boiefiling.fincen.gov/ or visit https://www.fincen.gov/boi for more information.

Background­

The bipartisan Corporate Transparency Act, enacted in 2021 to curb illicit finance and protect U.S. national security, requires many companies doing business in the United States to report information to the Federal government about their beneficial owners—in other words, the real people who ultimately own or control them. The Financial Crimes Enforcement Network (FinCEN), a U.S. Treasury Department bureau, is implementing the law. Constituents should know:

• Filing is quick, secure, and free, and most companies should be able to report without the help of an accountant or lawyer.
• For companies with simple ownership structures, filing may take less than 20 minutes.
• Unless a company needs to update or correct information, it is a one-time filing requirement.

What is FinCEN?

The Financial Crimes Enforcement Network (FinCEN) is a bureau of the U.S. Treasury Department. Its mission is to safeguard the financial system from illicit activity, counter money laundering and the financing of terrorism, and promote national security through strategic use of financial authorities and the collection, analysis, and dissemination of financial intelligence.

*Who needs to file?

A company may need to report beneficial ownership information to FinCEN if it is:

• a corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
• a foreign company that was registered to do business in any U.S. state or Indian tribe by such a filing.
• There are twenty-three types of entities exempt from the reporting requirements with the most common being large operating entities, banks, and insurance companies.  For more information on whether your entity is exempt from filing, please see the list of exempt entities.

For more information about whether a company needs to file, visit fincen.gov/boi.

What do companies need to report?

Reporting companies need to report just a few pieces of information about themselves and their beneficial owners—and in some cases, their company applicants—such as name, address, and date of birth. More information is available here.

Who is a Beneficial Owner?

A Beneficial Owner is any individual who, directly or indirectly;

• exercises substantial control over a reporting company, or
• owns or controls at least 25% of the ownership interest of a reporting company.

Where can reporting companies file?

Companies can file at https://boiefiling.fincen.gov/ or visit https://www.fincen.gov/boi for more information.

What happens if a reporting company doesn’t file?

A person who willfully violates beneficial ownership reporting requirements may be subject to civil penalties of up to $591 for each day that the violation continues, as well as 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.

Video: Five-Minute Demo: How to File a Beneficial Ownership Information (BOI) Report