In an effort to save time and provide important education on the new CTA, we’ve created a high-level look at the rules and reporting requirements, along with useful links for more in-depth information – DOWNLOAD presentation (PPTX). Below are a few quick takeaways:
Determine if your business is a reporting company:
Your company may be a reporting company and need to report information about its beneficial owners if your company 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. FinCEN has a flowchart to help companies determine their status, as well as a list of 23 entities that are exempt in its FAQs. If your business is a “reporting company,” gather information about each beneficial owner, including name, date of birth, address, and details of their financial interest in the business.
Important dates:
Existing reporting companies created or registered to do business in the United States before January 1, 2024 must file their initial BOI report by January 1, 2025.
New reporting companies that are created or registered to do business in the United States on or after January 1, 2024 (but before January 1, 2025) will have 90 calendar days after official notification of effective registration or creation to file initial BOI reports. That period will shorten to 30 days for companies registered or created after January 1, 2025.
Potential penalties:
The new act also sets some penalties for non-compliance, including civil penalties up to $500 per day for failure to file a BOI report or for supplying fraudulent information. Additionally, criminal penalties of up to two years in prison for willful violation are possible.
Expect changes:
We expect the rules to continue to evolve as the CTA goes fully into effect. Consulting with an experienced attorney is the best way to ensure your company is in compliance with the new CTA law and BOI reporting requirements, and to avoid any potential legal or reputational issues. The Corporate attorneys at Messner Reeves have extensive experience in all matters of corporate law, and can help you navigate the new regulations. Contact us today!
