The Corporate Transparency Act (CTA) imposes a new reporting requirement effective January 1, 2024 which impacts many entities formed as an LLC, partnership, S corporation, and C corporation. The new Beneficial Ownership Information (BOI) reporting requires many companies to report information regarding the company’s beneficial owners, meaning certain individuals with substantial control or at least 25 percent ownership over the company. Several exemptions for filing are available, such as those for certain large operating companies.
The purpose of the new BOI reporting requirement is to improve transparency of corporate structures and discourage use of shell corporations. The BOI report is submitted to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. There is no tax imposed with the report. There are potentially significant penalties for failure to file the BOI report. Entities in existence prior to January 1, 2024, must file the initial BOI report by January 1, 2025. Entities formed after January 1, 2024, must file the initial 2024 BOI report within 90 days after receiving actual or public notice that the company’s creation or registration is effective, whichever is earlier. Companies created or registered on or after January 1, 2025, must file the BOI report within 30 calendar days of receiving actual or public notice that the company’s creation or registration is effective. Any updates or corrections to beneficial ownership information previously filed must be submitted within 30 days.
The following website has more information regarding BOI reporting.
Gunnip & Company is offering assistance with BOI reporting. Please contact our office by December 1, 2024 if you would like to discuss whether the BOI reporting requirement applies to your company or if you need assistance with preparing the initial BOI report.