If you are a business owner, something to be aware of that may apply to you and your business(es).
In 2021, Congress enacted the Corporate Transparency Act (“CTA” ) to curb illicit finance which went into effect January 1, 2024. This law requires many companies doing business in the United States to report information about who ultimately owns or controls them. These qualifying companies must report Beneficial Ownership Information (“BOI” ) about their owners–the individuals who ultimately own or control the company–to the Financial Crimes Enforcement Network (“FinCEN” ), a bureau of the U.S. Department of the Treasury.
Please note the following deadlines as reported on the FinCEN Beneficial Ownership Information FAQ page
B. 2. When do I need to report my company’s beneficial ownership information to FinCEN?
A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025 to file its initial beneficial ownership information report.
A reporting company created or registered on or after January 1, 2024, and before January 1, 2025, will have 90 calendar days after receiving notice of the company’s creation or registration to file its initial BOI report. This 90-calendar day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.
Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports with FinCEN.
Please note the following potential penalties as reported on the FinCEN Beneficial Ownership Information FAQ page
K. 2. What penalties do individuals face for violating BOI reporting requirements?
As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. However, this civil penalty amount is adjusted annually for inflation. As of the time of publication of this FAQ (April 18, 2024) this amount is $591.
A person who willfully violates the BOI reporting requirements may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.
On its surface BOI reporting may appear to be something accountants and tax preparers can easily help their clients navigate. However, assisting with reporting to FinCEN, or even answering one-off questions related to CTA may not only lead to bad or incomplete advice, but may also cross the line into the practice of unlicensed law. And given the severity of the financial and criminal penalties associated with violating the CTA, many tax and accounting firms are not providing BOI reporting services at this time.
As a result, assisting you with your compliance with the CTA, including BOI reporting, is not within the scope of any engagement with Sean McConnell, Patwell Consultants LLC, or its staff. You have sole responsibility for your compliance with the CTA, including its BOI reporting requirements and the collection of relevant ownership information. We shall have no liability resulting from your failure to comply with CTA. Information regarding the BOI reporting requirements can be found at https://www.fincen.gov/boi
FinCEN also published a brief How To File video on YouTube: https://www.youtube.
Consider consulting with legal counsel if you have questions regarding the applicability of the CTAs reporting requirements and issues surrounding the collection of relevant ownership information.
