The Corporate Transparency Act (CTA) requires “reporting companies” to report certain beneficial ownership information (BOI) to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) in order to enhance corporate transparency in the United States.
As part one of a series highlighting the material provisions of the CTA, this article discusses upcoming deadlines for reporting companies in order to assist businesses with CTA compliance.
Deadlines for Filing Reports, Updates, and Corrections
FinCEN estimates that 32,000,000 business entities in existence as of January 1, 2024 will be required to make BOI filings, and 5,000,000 additional reporting companies will be required to report each subsequent year. Reporting companies must file beneficial ownership information before the following deadlines:
- For entities formed before January 1, 2024, the deadline to file an initial BOI report is January 1, 2025. These reports will only be required to include information about the reporting company and its beneficial owners (not company applicants).
- Entities created after January 1, 2024, but before January 1, 2025, have 90 days after their formation to file initial BOI reports. Such reports are required to include information about the reporting company itself, its beneficial owners, and its company applicants.
- Entities created on or after January 1, 2025, however, will only have 30 days after their formation to file initial BOI reports. Such reports are required to include information about the reporting company itself, its beneficial owners, and its company applicants.
- Additionally, reporting companies must submit an updated BOI report within 30-days of any changes to the information previously reported.
Entities Required to Report to FinCEN
The CTA’s beneficial ownership reporting requirements apply to “reporting companies.” The term “reporting companies” is broadly defined as entities that are created or registered to do business by filing a document with a secretary of state or similar office, including corporations, limited liability companies, limited liability partnerships, limited liability limited partnerships, statutory trusts, and most limited partnerships.
Next Steps
Any “reporting company” should establish procedures to identify and verify the beneficial owners, maintain accurate records, and submit timely reports as required under the CTA. Considering FinCEN’s broad interpretation of “substantial control” and “ownership interests,” and in light of the apparent legislative intent to require disclosure, reporting companies with more complex ownership structure may want to consider consulting with a legal or other professional well-versed in the CTA to assist in determining which individuals must be reported as beneficial owners.
For more information, FinCEN issued a helpful Small Entity Compliance Guide in December 2023, which you may access by clicking here, and continues to provide helpful guidance through its Frequently Asked Questions, which you may access by clicking here. FinCEN has also created a webpage for Beneficial Ownership Information (here) and reports may access the BOI E-Filing system (here) if you would like to file your report yourself.
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