What is the Corporate Transparency Act (CTA)?
The Corporate Transparency Act (CTA), enacted as part of the National Defense Authorization Act for Fiscal Year 2021, requires many businesses to disclose Beneficial Ownership Information (BOI) to combat illicit activities like money laundering and terrorism financing.
Starting January 1, 2024, businesses will need to report ownership details, including individuals who own or control the company. The CTA falls under the Bank Secrecy Act and mandates filings with the Financial Crimes Enforcement Network (FinCEN), not the IRS. The goal is to increase transparency and prevent the misuse of companies for criminal activity.
What is a BOI Report?
A BOI report discloses the individuals who own or control a company. This includes personal details such as:
Full name
Date of birth
Address
Identification information, including a unique number from a government-issued ID (e.g., passport, driver’s license) and an image of the ID
Who Needs to File a BOI Report?
The requirement applies to both domestic and foreign entities registered to do business in the U.S. Examples of entities that must report include corporations, LLCs, and similar entities. However, certain exemptions exist, such as:
Publicly traded companies
Banks and credit unions
Some large operating companies with over 20 employees and annual revenue exceeding $5 million
When Are BOI Reports Dueare the Deadlines for Filing BOI Reports??
****Please see below on nationwide court injunction issued December 3, 2024
New entities formed in 2024: File within 90 days of formation.
New entities formed after 12/31/2024: File within 30 days of formation.
Existing entities formed before 2024: File by January 1, 2025 (NOTE: Currently delayed due to a federal court ruling).
Changes to beneficial owner information: File within 30 days of any change.
Who Is Considered a Beneficial Owner?
A beneficial owner is any individual who directly or indirectly:
Exercises "substantial control" over the reporting company, or
Owns or controls at least 25% of the ownership interests of the reporting company.
Substantial control" includes the ability to influence or direct decisions, even if the individual does not have an ownership stake. Senior officers may also qualify.
For more detailed guidance, visit the CTA regulations on FinCEN’s website.
What Are the Risks of Non-Compliance?
Penalties for failing to comply with BOI requirements can be severe:
Fines: Up to $500 per day, capped at $10,000 for each violation.
Jail time: Up to two years.
Ensuring timely and accurate filings is critical to avoiding these penalties.
What Entities Are Exempt from Reporting?
Exemptions include publicly traded companies, regulated financial institutions, and large operating companies that meet specific criteria (20+ employees, $5M+ revenue, U.S. headquarters).
Latest Update (December 2024)
A nationwide injunction was issued on December 3, 2024, temporarily halting enforcement of the CTA and BOI reporting deadline. At this time, no immediate action is required, but businesses should remain prepared for future changes depending on how the appeal process unfolds.
If you’ve already submitted your BOI: No further action is needed unless the injunction is lifted.
If you’ve been gathering BOI details: Continue preparing for submission, as the original deadline may still apply once the injunction is lifted.
For independent filers: Be ready to file as soon as enforcement resumes.
BNA is closely monitoring the situation and will keep customers updated.
How Can BNA Assist with BOI Filings?
BNA offers a BOI filing service for a flat fee of $500 per entity. To request our assistance, complete our BOI Filing Request Form, and we will get in touch to guide you through the next steps.
For more information, you can refer to the CTA regulations on FinCEN’s website.
Additional Resources
FinCEN FAQ: BOI FAQs