Deadline for compliance with CTA
Does the Corporate Transparency Act apply to you?
We live in an environment that brings constant changes in laws affecting businesses. The Corporate Transparency Act (CTA) went into effect on January 1, 2024, and requires all beneficial owners of certain companies to report information to the Financial Crimes Enforcement Network (FinCEN) within a particular timeframe, based on when the company was formed.
The CTA mandates the disclosure of Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). This new BOI reporting requirement (referred to as the “BOI Report” or “BOIR”) aims to combat money laundering, terrorism financing, and other illicit activities by requiring businesses to report both their ownership and disclose individuals who exert substantial control over the organization.
BOI Report: Not a Tax Filing
Given the CTA and BOIR are not accounting services and potentially require the assistance of specialty or legal professionals, Geylin & Associates, PC is not providing BOI Reporting services. However, as your trusted advisor, we want to ensure you are informed and prepared to comply with this new law. Non-compliance can lead to penalties of up to $591 per day, up to a total of $10,000 per entity.
Which Companies Must File?
In general, most corporations and LLCs in the U.S. must file unless they fall under a narrow category of exemptions. Please refer to the link for further clarification.
https://www.fincen.gov/boi-faqs#C_1
Note, over 97% of small or medium-sized businesses are expected to be classified as "Reporting Companies."
When To File
Companies formed prior to January 1, 2024, will have until January 1, 2025, to file an initial report.
Companies formed after January 1, 2024, but before January 1, 2025, will have 90 days from the date of formation or registration to file their initial report.
Companies formed after January 1, 2025, will have 30 days from the date of formation or registration to file an initial report.
If any changes occur regarding the reported information for either the company or a beneficial owner, an updated report must be filed within 30 days of such change.
While BOI Reporting is technically a "one-time" filing obligation (e.g., not an annual report), the CTA requires that an additional BOI report be filed any time a single piece of information on the original report changes. This new report must be filed within 30 days of the event causing the change of information. This could be as simple as a change of address, driver’s license expiring, passport expiring or the hiring/firing of a corporate officer, director, or manager.
How to File
There are three options on how to file:
1) FinCEN BOIR Portal – The Government has created a direct filing portal for BOIR. While the portal does not contain any interactive education, tooltips, etc., to assist with the filing, the government has provided a 21-page instruction manual, accompanied by a 50-page "Small Entity Compliance Guide," for those who wish to brave the filing on their own. There are additional limitations with the portal in that there's no ability to save/store information on their site for future "Change Of Information" (COI) filings, and only one individual may interact with the site to submit and upload the various pieces of information and documentation for each Reporting Company.
2) Third-Party Reporting Platform – There are several third-party solutions that provide an alternative to the limited Government portal for BOI Reporting. We have decided to partner with and recommend FileForms. Their basic filing service is $179/entity with a subscriptions service available for multiple entities.
3) Corporate Attorney or Advisor – For more complex situations, including multi-entity structures of greater than five companies, it may be prudent to utilize a corporate attorney or advisory firm.
Additional Resources
To help you understand the CTA and BOI requirements, we have compiled the following resources:
• FinCEN’s Small Business Compliance Guide
• FinCEN’s Fact Sheet on Final Reporting Rules
These resources are for information purposes only and should not be considered determinative. If you have questions regarding your filing requirements, you should seek advice from legal counsel.
IDENTIFIED SERVICE PROVIDER
Geylin & Associates, PC recommends a third-party solution to assist you in filing BOI reporting. File forms, does not have any affiliation with Geylin & Associates PC and Geylin & Associates PC does not benefit financially from this referral.
FileForms offers a filing and monitoring service to assist you with your CTA compliance and BOI reporting. Please keep in mind you are not required to use file forms. The choice of service provider rests solely with you.
The link below will bring you to the file forms/Geylin CPA page that will allow you to register and comply with the above.
https://partners.fileforms.io/l/83673901/
Summary
The CTA is a significant compliance requirement and is here to stay. It will affect the vast majority of our clients’ LLCs and corporations. The CTA rules capture far more entities and individual Beneficial Owners than may be expected, and the analysis, data collection, and Reporting will impose a meaningful burden to business owners and operators.
While Geylin & Associates, PC can help you collect certain information on a limited basis, we will not be able to prepare and submit the Report for you.
Please feel free to reach out with any questions.