Did you know that: (1) the Corporate Transparency Act, a federal law that became effective January 1, 2024, requires almost all U.S. companies to file a report with the Financial Crimes Enforcement Network of the U.S. Treasury (“FinCEN”) that discloses information to FinCEN about the company and its owners, (2) reports that are filed late are subject to a $500 a day fine, and (3) willful failure to file or willfully filing false information can be punished by up to two years in prison?
FinCEN estimates that over 32,000,000 U.S. companies must file a FinCEN Beneficial Owner Information (BOI) report in 2024. The CTA requires that reporting companies include any entity formed by filing organizational documents with a Secretary of State. This includes LLC’s, limited partnerships and corporations, with a few exceptions for companies like banks and accounting firms or large companies with more than 20 full time employees and $5 million in gross sales. There is NO exception for entities such as LLC’s that merely hold real estate.
If you are a 25% owner, or have substantial control over a reporting company (such as the Manager of an LLC or officer of a corporation), you must provide your personal information and a BOI must be filed with the criminal division. In lieu of providing personal information to the reporting company, it is recommended to obtain a FinCEN Identifier by submitting your information directly to the criminal division. The reporting company will then need to fill out the Beneficial Owner Report using that information. Also important to note when changes occur, updated reports must be filed within 30 days. The attorneys at PK Boston Law can assist you with all steps to make sure you are compliant with these new regulations!