Important Information Regarding New Corporate Transparency Act (CTA) Requirements
Please be aware that effective January 1, 2024, the Corporate Transparency Act (CTA) requires all new business organizations formed under any state as formal organizations are required to file a beneficial ownership information report (a BOIR) directly with FinCEN (the Financial Crimes Enforcement Network, an arm of the U.S. Treasury Department).
Please read below to fully understand your obligations, deadlines, and for instructions on how to proceed with handling these filings yourself. For our clients, our staff is available by phone to answer questions as you go through this process, but we hope these instructions will guide you seamlessly to a successful completion of these requirements.
CTA Requirements & Important Information
All BOI Reports must be filed within 90 days of the organization being created, if created after January 1, 2024
*Entities formed before this date have until December 31, 2024 to file and become compliant
*Entities being formed starting 2025 will have 30 days to file and become compliant
BOI Reporting includes reporting 1) all individuals that own 25% or more of the beneficial interests of the Company and/or 2) all controlling persons
Failure to file these reports timely can result in a fine of $500/day, up to $10,000, and for fraudulent actions, even jail time
Certain entities may be exempt, but generally all business entities will be required to file.
There are 23 exceptions to needing to file a BOI Report, and most of them generally involve non-profits, public companies, banks, and in some cases private equity and venture capital funds (if you think you might be exempt, give us a call)
More information, including direct FAQs from FinCEN and what those exceptions are can be found at this link.
Directions to File
Step One: Create your List
A. It starts with a list; create a list which includes all the information required for each entity you need to file for:
Name of entity
List of governing persons
List of beneficial owners over 25%
EIN for each entity
2. Step Two: Gather Everyone’s Personal Information – *Pro Tip: Use FinCEN IDs to Efficiently File
A. On your list, please gather the following for each person who will be included on your filings:
Legal name
Address
Copy of valid, up-to-date, photo ID (.PDF or .JPEG)
Social Security Number/TIN
Birth Date
*ProTIP: FinCEN allows every person to obtain a FinCEN ID, a unique code that identifies them. Instead of gathering all information above, you can just obtain FinCEN IDs from each person if they have one.
While optional and not required, we highly recommend individuals obtain a FinCEN ID, especially those that will be a part of multiple entities/filings over time.
An individual beneficial owner or company applicant's FinCEN ID can be reported instead of required information about that individual on the reporting company's Beneficial Ownership Information Report submitted to FinCEN.
FinCEN IDs can be obtained, here: https://fincenid.fincen.gov/landing
Note that to obtain a FinCEN ID, an individual will need the same information above, and will require a login.gov account. The link above includes detailed instructions on how to obtain.
3. Step Three: File your BOI Report
BOI reports can be filed electronically, here: https://boiefiling.fincen.gov/
While paper copies can be printed and mailed, we highly recommend filing online.
With your list and information gathered, proceed to follow the instructions and file the BOI Report for each entity.
Be sure to save copies of the reports to your file.
Step Four: Amendments
While the BOI filing is a one-time filing, you do have an affirmative responsibility to amend a BOI filing within 30 days should things change (for example, additional beneficial owners above 25% are added, removed, or if governing persons change.
For our clients who have any questions, please do not hesitate to hesitate to reach out to our office at 972-460-8353, or email us at filings@mwfirm.com.