The Corporate Transparency Act was adopted in the 2021 Defense Authorization Act. The law was set to take effect in 2024. There are several different aspects that a corporation must be on the look out for: (1) Who is required to file, (2) what documentation must be filed, (3) where can you file that information, and (4) the deadline.
Who is Required to File?
The types of corporations that must file are traditional incorporated businesses, S corporations, C Corporations, Limited Partnerships, Limited Liability Partnerships, Limited Liability Limited Partnerships, and LLCs. There is a long list of exempt corporations that include: banks, credit unions, accounting firms, public utilities, tax exempt entity, investment company or advisor, and many others in the financial industry.
What Documents are Required?
The main item that must be filed as part of the Corporate Transparency Act is Beneficial Ownership Information (BOI). The BOI form first requires the reporting company name, a FinCEN ID (which any business can request to receive on the form), Tax Identification number, and address. Then, there will be a beneficial owner form. Someone who qualifies as a beneficial owner is any person within the corporation that has a major influence on the company’s decisions or operations, owns at least 25% of the company, or has a similar level of control over the company’s equity.
Where Can the BOI be Filed?
The BOI can be filed electronically on the Financial Crimes Enforcement Network website. On this website, there is an electronic portal where you can submit the BOI straight to the FinCEN. After filing, a receipt will be sent to the email listed in the form.
When Must the Form be Filed?
The deadline for filing the BOI form depends on when the entity was formed. Entities formed before January 1, 2024, have one year to file their initial BOI reports. Entities formed on or after January 1, 2024, but before January 1, 2025, have 90 days after formation to file their initial BOI reports.
If you have questions regarding the implementation of the Corporate Transparency Act, consider contacting one of our attorneys today.