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The Corporate Transparency Act (CTA) will be fully enacted starting January 1, 2024. Its core requirement compels nearly every small to medium-sized U.S. business to submit a detailed Beneficial Ownership Information (BOI) report to the Financial Crimes Enforcement Network (FinCEN).
A Beneficial Ownership Information report is a critical document required under the CTA. This report should contain:
– Complete company details.
– Identifying information of beneficial owners, including those with substantial control.
– Specific data on company applicants.
– Identification documents for each owner or company applicant.
To ascertain whether your business must comply with the CTA, utilize our user-friendly Company Checker tool. The CTA’s exemptions are notably stringent, with eligibility primarily designated for entities within strictly regulated sectors. Most businesses will fall into the “reporting company” category as defined by FinCEN’s final rule and, thus, will be required to file.
Exemptions are notably extended to large operating companies—specifically, those with 21 or more full-time employees and an excess of $5 million in reported annual sales. Furthermore, an exemption is available for dormant entities that were established before 2020, having ceased operations with no assets or sales.
Noncompliance is not an option, given the steep penalties involved. Failing to file a CTA report could incur fines of up to $10,000. The CTA’s reach is considerable, potentially impacting over 35 million existing businesses and an estimated 5 million new entities each year.
For businesses already operational before 2024, there is a grace period until December 31, 2024, to submit the initial BOI report.
Entities formed on or after January 1, 2024, are afforded a 30-day window following their creation to comply.
Keep in mind, CTA reporting is an ongoing obligation. Any changes to the information previously reported to FinCEN must be updated within 30 days, with anticipated changes for half of all companies annually.
Smaller companies with less than ten owners can file their CTA report themselves online, while larger companies may want to find a specialized law or accounting firm to help them file.
Select a card below based on the number of owners at your reporting company.
We recommend companies with simple ownership structures take their list of owners to an online filing platform to complete their reports. TurboCTA.com is an affordable solution for business owners.