Beginning on January 1, 2024, businesses across the US will need to comply with new reporting rules under the Corporate Transparency Act (CTA). This act, passed as part of the Anti-Money Laundering Act of 2020, requires certain corporations and similar entities to report their ownership and control information to the Financial Crimes Enforcement Network (FinCEN).
If your business is structured as a corporation, LLC, or limited partnership, chances are you will need to file a report. Here’s what you need to know:
Under the CTA, businesses are required to report their “beneficial ownership information” (BOI). This includes:
In addition, businesses must report any changes to this information within 30 days of the change.
While banks, securities brokers, insurance companies and a few other entity types are exempt, most corporations and similar US-based entities must comply, including those with foreign owners. The only exception would be if your entity already reports similar information under existing federal or state reporting laws.
Starting on January 1, 2024, qualifying businesses can file their reports online at boiefiling.fincen.gov/fileboir.
Important deadlines include:
Failure to comply can lead to penalties of $500 per day (up to $10,000) or even imprisonment up to 2 years.
Given the relatively short timeline and steep penalties, businesses should begin preparing now by gathering ownership information.
