CLIENT ALERT

Grace Enchill

Corporate Transparency Act – Beneficial Ownership Interest Reporting Requirements

The Corporate Transparency Act (CTA)[1] requires many companies formed or operating in the United States to report information about their beneficial owners to Treasury’s Financial Crimes Enforcement Network (FinCEN), which will store this sensitive information in a secure, confidential database. This reporting requirement makes it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.

WHO needs to file a beneficial ownership information (BOI) report?
Companies who organized by filing a document with the secretary of state. There are 23 types of exempt entities, like banks and tax-exempt entities. Review the FinCEN’s Small Entity Compliance Guide to review the criteria for exempt entities.[2]

WHAT information needs to be reported?

  • Company information: the company’s full legal name (and any trade names), address, jurisdiction of formation, and taxpayer identification number.
  • Beneficial owner information: the full legal name, date of birth, address, and government photo identification of all beneficial owners. A beneficial owner is any individual who, directly or indirectly, exercises substantial control over the company or owns or controls at least 25 percent of the ownership interests.
  • Company applicant information: for companies created or registered on or after January 1, 2024, the full legal name, date of birth, address, and photo identification of all individuals involved in the filing of the creation or first registration document.

For explanation of each of these categories, consult the Small Entity Compliance Guide.

WHERE is the BOI report filed?
BOI reports can be filed online at https://boiefiling.fincen.gov/.

WHEN must the initial BOI report be filed?

  • If your company existed before January 1, 2024, it must file its report by January 1, 2025.
  • If your company was created or registered on or after January 1, 2024 (and before January 1, 2025), then it must file its report within 90 calendar days of its creation or registration.
  • If your company was created or registered on or after January 1, 2025, it must file its report within 30 calendar days of its creation or registration.

HOW MUCH does it cost to file?
FinCEN does not charge a fee to file the BOI report or any updates. Heller & Robbins PC charges a $100 legal fee to prepare and submit the BOI report on a company’s behalf.
  Your company must file an updated report within 30 days of any change of information. There are civil and criminal penalties for willful violations of the BOI reporting requirements. Please contact our office if you have any questions: (413) 637-2255.

[1] Text – H.R.2513 – 116th Congress (2019-2020): Corporate Transparency Act of 2019, H.R.2513, 116th Cong. (2019), https://www.congress.gov/bill/116th-congress/house-bill/2513/text.
[2] Available at https://www.fincen.gov/boi/small-entity-compliance-guide.