At Bratton Law Group, we strive to keep our clients informed about important legal developments that may impact their businesses and financial plans. We want to remind you of an important legal requirement for those that have entities such as an LLC or S-Corp. We want to bring an important new legal requirement to your attention. The Corporate Transparency Act (CTA), passed by Congress in 2021, introduces a new Beneficial Ownership Information (BOI) reporting requirement. This law aims to enhance transparency and deter illicit financial activities by requiring certain businesses to report their ownership information to the Financial Crimes Enforcement Network (FinCEN). Read on to learn about filing deadlines, who must report, and what information is required.

In 2021, Congress passed the Corporate Transparency Act on a bipartisan basis. This law creates a new beneficial ownership information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.

A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025 to file its initial beneficial ownership information report.

A reporting company created or registered on or after January 1, 2024, and before January 1, 2025, will have 90 calendar days after receiving notice of the company’s creation or registration to file its initial BOI (Beneficial ownership information) report. This 90-calendar day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.

Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports with FinCEN. If you are required to report your company’s beneficial ownership information to FinCEN, you will do so electronically through a secure filing system available via FinCEN’s BOI E-Filing website (https://boiefiling.fincen.gov). FinCEN expects that many, if not most, reporting companies will be able to submit their beneficial ownership information to FinCEN on their own using the guidance FinCEN has issued. Reporting companies that need help meeting their reporting obligations can consult with professional service providers, such as lawyers, accountants, or enrolled agents.

Anyone a reporting company authorizes to act on its behalf—such as an employee, owner, or third-party service provider—may file a BOI report on the reporting company’s behalf. When submitting the BOI report, individual filers should be prepared to provide basic contact information about themselves, including their name and email address. The person filing the BOI report, including a third-party service provider, must certify on behalf of the reporting company that the information is true, correct, and complete.

Unless a sole proprietorship was created (or, if a foreign sole proprietorship, registered to do business) in the United States by filing a document with a secretary of state or similar office, it is not considered a reporting company. An entity is a reporting company only if it was created (or, if a foreign company, registered to do business) in the United States by filing such a document. Filing a document with a government agency to obtain (1) an IRS employer identification number, (2) a fictitious business name, or (3) a professional or occupational license does not create a new entity, and therefore does not make a sole proprietorship filing such a document a reporting company.

A corporation treated as a pass-through entity under Subchapter S of the Internal Revenue Code (an “S Corporation” or “S-Corp”) that qualifies as a reporting company—i.e., that is created or registered to do business by the filing of a document with a secretary of state or similar office, and does not qualify for any of the exemptions to the reporting requirements—must comply with the reporting requirements. The S-Corp’s pass-through structure for tax purposes does not affect its BOI reporting obligations. In particular, pass-through treatment under Subchapter S does not qualify an S-Corp as a “tax-exempt entity” under FinCEN BOI reporting regulations.

Beneficial ownership information (BOI) reporting requirements include:

Reporting companies

Provide their legal name, trade names, address, jurisdiction of registration, and taxpayer identification number

Beneficial owners

Provide their name, date of birth, residential address, and an identifying number from an acceptable ID document

ID document

An acceptable ID document includes a non-expired U.S. driver’s license, a non-expired U.S. passport, or a non-expired identification document issued by a state, local government, or Indian tribe

Image of ID document

An image of the ID document must be submitted

Filing deadlines

Reporting companies created or registered before January 1, 2024 have until January 1, 2025 to file. Companies created or registered in 2024 must file within 90 calendar days, and companies created or registered on or after January 1, 2025 must file within 30 calendar days

Updates

Any updates or corrections to beneficial ownership information must be submitted within 30 days

S-Corporations

S-Corporations that qualify as reporting companies must comply with the reporting requirements

If you have questions or need assistance navigating these new requirements, please feel free to reach out. We’re here to guide you every step of the way.