The federal Corporate Transparency Act (CTA) became effective on January 1, 2024, and despite multiple challenges and ongoing court cases, the CTA remains in effect. The CTA requires many entities to file beneficial ownership information reports (BOI Reports) with the U.S. Treasury’s Financial Crimes and Enforcement Network (FinCEN). Below are key considerations to be aware of as we approach the end of the year:
- Each entity that is determined to be a reporting company is responsible for the timely filing of a BOI Report with FinCEN, including the timely filing of any updates thereto. This may include a separate BOI Report for each subsidiary in an organizational structure. Failure to do so may result in civil or criminal penalties.
- If it is determined that a BOI Report must be filed with FinCEN, the deadline to make an initial filing for entities formed after January 1, 2024 is 90 days after formation; however, this deadline will reduce to 30 days starting January 1, 2025. The deadline to make an initial filing for entities formed before January 1, 2024 is December 31, 2024.
- Depending on the complexity of your organizational structure, it may take a significant amount of time to analyze which of your entities are reporting companies and which individuals related to your entity (i.e. significant owners and decision-makers) must provide their FinCEN identification number or personal information to complete an entity’s BOI Report. Thus, if you have not done so already, we recommend beginning this analysis immediately and discussing with your legal and financial advisors to ensure you have enough time to compile all required information and file your BOI Report before the end of the year or earlier deadline.
- Even if you believe you are exempt from reporting, we recommend confirming with a legal advisor who is knowledgeable about the CTA. There are several scenarios that seemingly would lead to the conclusion that an entity, including a dissolved entity, would not need to file a BOI Report; however, based on current FinCEN guidance, such entities may still need to file a BOI Report.
