New Reporting Requirements Under the Corporate Transparency Act

The Corporate Transparency Act (CTA) introduces significant new reporting obligations for many businesses operating in the United States. Starting January 1, 2024, certain companies must file Beneficial Ownership Information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN).

Who Must Report

The CTA applies to "reporting companies," which include:

Domestic corporations, limited liability companies, and similar entities created by filing with a secretary of state or similar office
Foreign entities registered to do business in the United States

Some exemptions exist, including for publicly traded companies, certain nonprofits, and some large operating companies.

What to Report

Reporting companies must provide information on each beneficial owner, defined as individuals who:

Exercise substantial control over the reporting company
Own or control 25% or more of the ownership interest

For each beneficial owner, companies must report:

Full name
Date of birth
Current residential address
Unique identifying number from an acceptable identification document
A photocopy of the identification document

Additionally, basic company information such as legal name, trade names, address, jurisdiction of formation, and taxpayer identification number must be submitted.

Reporting Deadlines

Existing companies (created before January 1, 2024): Must file by January 1, 2025
New companies (created in 2024): Must file within 90 days of formation
Companies created on or after January 1, 2025: Must file within 30 days of formation

How to File

Reports must be filed electronically through FinCEN's Beneficial Ownership Secure System (BOSS). Filing is free of charge.

Importance of Compliance

Failure to comply with these reporting requirements can result in significant penalties, including:

Civil fines of up to $500 per day
Criminal penalties of up to two years imprisonment and $10,000 in fines