Understanding Beneficial Ownership Report Requirements

Introduction

In January 2021, Congress enacted the Corporate Transparency Act (CTA) to enhance transparency in business ownership and reduce illegal activities such as money laundering and fraud.

Under this law, companies must inform the Financial Crimes Enforcement Network (FinCEN) about their owners or those who control them, ensuring that authorities know who is behind each business.

FinCEN launched a Beneficial Ownership Information (BOI) reporting website on January 1, 2024, to facilitate this reporting process.

Reporting Requirements

Starting January 1, 2024, companies must adhere to specific reporting guidelines based on their creation date:

• For companies created before January 1, 2024: The first BOI report is due by January 1, 2025.

• For companies created in 2024: Reports must be filed within 90 days of receiving their creation or registration notice.

• For companies created on or after January 1, 2025: Reports must be submitted within 30 days of receiving their creation or registration notice.

These deadlines are crucial to avoid penalties, which include a fine of $500 per day. However, FinCEN has extended deadlines for businesses affected by recent natural disasters.

Assistance for Hurricane Victims

FinCEN recognizes that recent hurricanes—specifically Beryl, Debby, Francine, Helene, and Milton—have impacted many businesses, allowing additional time for these companies to submit their BOI reports. The new deadlines for each hurricane are as follows:

• Hurricane Beryl: Reports are due between July 4, 2024, and October 2, 2024.

• Hurricane Debby: Reports are due from July 31, 2024, to October 29, 2024.

• Hurricane Francine: Reports are due from September 8, 2024, to December 7, 2024.

• Hurricane Helene: Reports are due from September 22, 2024, to December 21, 2024.

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  Hurricane Milton: Reports are due from October 4, 2024, to January 2, 2025.

FinCEN is also available to assist companies based outside the disaster areas that need to access records located within those areas. These companies should contact FinCEN for assistance.

Conclusion

The Corporate Transparency Act aims to increase transparency in business ownership in the U.S. Companies must understand their reporting obligations to avoid penalties, promoting a more transparent and accountable business environment.

Companies can contact FinCEN through its official website for assistance with BOI reporting. By staying informed, businesses can successfully comply with the requirements of the Corporate Transparency Act.

Information gathered from the FinCEN website: https://boir.org/