11/18/2024
Corporate Transparency Act- Beneficial Ownership Information
MANDATORY reporting requirement (BOI) for LLC's and Corporations.
Most businesses are now required to comply with the corporate transparency act (CTA) that was enacted into law as part of the National Defense act. The corporate transparency act requires the disclosure of the beneficial ownership information (otherwise known as BOI) of certain entities from people who own or control a company.
The Corporate transparency act is not part of the tax code and will not be filed with the IRS, but instead with the Financial Crimes Enforcement Network. (FinCEN) The intent of the BOI reporting is to help combat money laundering, the financing of terrorism and other illegal activities.
Companies required to report include Corporations, Limited Liability companies (LLC's) or any similar company created by filing a document with the Secretary of States office. Sole proprietors or other companies not created by filing a document with the Secretary of State are not required to report under the corporate transparency act.
All beneficial owners must file. A beneficial owner is an individual who has substantial control of a reporting company if they direct, determine, or exercise substantial influence over important decisions of the reporting company. This includes any officers of the reporting company.
All existing companies created or registered before January 1st, 2024, must file this report prior to January 1st, 2025.
Information that must be provided and kept current for these beneficial owners includes the owner’s legal name, physical address, date of birth, and a non-expired ID such as a driver's license or passport. The beneficial owner will have to provide an image of these documents to FinCEN.
If this form is not completed prior to January 1, 2025, you will be at risk for non-compliance. Penalties for not complying with the BOI reporting can result in criminal and civil penalties of $591.00 per day and up to $10,000 and may include up to two years of jail time.
If you believe you are a beneficial owner, to ensure you remain compliant please go to https://fincen.gov/boi with the information previously listed and follow the directions provided before the January 1, 2025, deadline.
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