Deadline to File
If your small business was registered prior to 1/1/2024, your deadline to file is 1/1/2025. If you registered after 1/1/2024, the deadline is urgent.
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Corporate Transparency Act is a new requirement with hefty penalties -- contact us for help today!
FinCen Solutions
Terri Timmermann
Terri Timmermann
Terri Timmermann
Terri Timmermann
Terri Timmermann
Prior to working at FinCen Solutions, Terri worked at Centene Corporation completing contracts. Terri is eager to help small businesses navigate the new complex rules surrounding the requirements for small businesses to remain compliant with the Corporate Transparency Act.
The Value of our Why
We help clients determine whether they are required to file under the Corporate Transparency Act.
We assist clients in determine their filing deadline.
We partner with the top FinCen third party filer. They do a review of the report prior to filing.
We provide reminders to help clients stay on top of updating their reports when pertinent information changes
What is the Corporate Transparency Act?
The Corporate Transparency Act (CTA) is a U.S. federal law enacted in 2021 with the primary goal of combating illicit activities such as money laundering, terrorist financing, and tax evasion. It requires certain types of businesses to report information about their beneficial owners.
Key Provisions:
- Beneficial Ownership Reporting: The CTA mandates that eligible businesses submit a Beneficial Ownership Information (BOI) report to the U.S. Department of Treasury's Financial Crimes Enforcement Network (FinCEN). This report provides details about the individuals who ultimately own or control the business.
- Eligible Businesses: The law applies to corporations, limited liability companies (LLCs), and other similar entities created by filing a document with a state or tribal secretary of state.
- Reporting Requirements: Businesses must report the name, date of birth, and residential address of individuals who meet certain criteria, such as owning 25% or more of the business, exercising substantial control, or receiving substantial economic benefits.
- Exemptions: Certain types of businesses, including publicly traded companies and those with fewer than 25 employees, are exempt from the reporting requirements.
Purpose:
- Combat Illicit Activities: The CTA aims to make it more difficult for individuals to use shell companies or other legal entities to launder money, finance terrorism, or evade taxes.
- Enhance Law Enforcement: By providing law enforcement agencies with access to beneficial ownership information, the CTA can help them investigate and prosecute financial crimes.
- Increase Transparency: The act promotes greater transparency in the corporate world, allowing for better understanding of business ownership and control.
Implementation and Challenges:
- Initial Reporting Deadline: The CTA went into effect in January 2024, and the initial reporting deadline for most eligible businesses is January 1, 2025.
- Compliance Challenges: Some businesses have faced challenges in complying with the CTA, particularly in identifying and collecting information about their beneficial owners.
- Privacy Concerns: The act has raised privacy concerns, as it requires the collection and disclosure of personal information.
Overall, the Corporate Transparency Act represents a significant step towards enhancing transparency and combating illicit activities in the United States. However, its effectiveness will depend on the extent of compliance, the ability of law enforcement agencies to utilize the information effectively, and the ongoing development of regulations and guidance.
Ask Terri
Please reach us at terri@fincen-solutions.com if you cannot find an answer to your question.
The Corporate Transparency Act is a new requirement that requires beneficial owners of small businesses to file a report with FINCEN. Beneficial owners can be individuals or trusts. There are exemptions that some small businesses may qualify.
FinCen will file your report on behalf of your small business with FinCen, the entity that oversees the Corporate Transparency Act.
Every new corporation, limited liability company (LLC), limited partnership and any entity whose existence is created by a filing with a Secretary of State in any state must file with the Financial Crimes Enforcement Network (FinCEN).
To break it down further, domestic reporting companies - corporations, limited liability companies, and any other entities created by the filing of a document with secretary of state or similar office in the United States.
Foreign reporting companies - entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by filing a document with a secretary of state or similar office.
Based on the way your corporate is set up, this may require that trusts also complete a report. For example, if your trust is a member of your LLC then your trust (and thereby the trustees) would need to complete the Beneficial Owner Information.
Each company may have more than one beneficial owner. A beneficial owner is anyone who owns or controls at least 25% of the interests of a reporting company.
- Legal name and all trade names or DBA names for the company
- actual street address for the company's principal place of business
- state of formation
- identification number
- identity document such as articles of incorporation
The short answer is yes. However, when you file with us you will receive confirmation that your report is correct. It is also reviewed by a third party to ensure accuracy. Also, if changes need to be made we can help you implement the changes without having to file a new report.
There are some exemptions for large corporations. These large entities include regulated companies such as banks and credit unions, large companies with more than 20 employees and $5 million in annual revenue and companies that are inactive or dormant, which is defined as not having any kind of assets and has not sent or received funds greater than $1,000 directly or indirectly.
As part of our software, we can check whether you qualify for an exemption.
If your small business was registered with your secretary of state or similiar office prior to 1/1/24 then your deadline is 1/1/25. If your small business was registered with your secretary of state or similar office after 1/1/24, you have 90 days and after 1/1/25 new registrations will have 30 days.
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, 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.
Cost is based on scope of engagement and complexity of the filing.
The Financial Crimes Enforcement Network wants to ensure that criminals are not hiding behind fake companies.
This is a new requirement for the United States but other countries have implemented this or something similar already.
Still Have Questions?
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