Federal Rule Demands Small Business Must File Ownership Information Report

Article Presented By Hanes Total Healthcare Center…

The Corporate Transparency Act (CTA), aimed at combating illicit financial activity, went into effect on January 1, 2021. Under the act, small businesses in the United States need to file beneficial ownership information reports (BOIR) with the Department of the Treasury by Businesses must file by March 21st to be compliant.

1. Determine if your business needs to file a BOI Report

All businesses that fall under the definition of a reporting company must file a BOIR by January 1, 2025.

What is a reporting company?

• A for-profit, privately held company registered to conduct business in the U.S.
• Has 20 or fewer employees or has $5 million or less in gross sales or receipts.
• There are 23 exemptions. Find out if your business is exempt here. Note: Publicly traded companies and non-profits do not fall under the CTA, as they are subject to their own reporting requirements.

2. If your business needs to report, identify the beneficial owners

Owns or controls at least 25% of an organization.
Serves as a senior officer, such as a president, CEO, or general counsel.
Has authority to appoint or remove senior officers, board members, or other similar roles.
Makes important decisions concerning the company’s business, finances, and/or structure.

3. Note your deadline to file

For most eligible small businesses, the deadline to file these reports is January 1, 2025.

Here are some exceptions:

• New companies created between Jan. 1, 2024 and Jan. 1, 2025 need to file within 90 days of formation.
• Companies formed after Jan. 1, 2025 will need to file within 30 days of formation. Note: BOIR updates or corrections need to be filed within 30 days of the change.

4. Gather the required information Eligible small businesses will need to report the following information about their companies:

• Full legal nameAny trade names or “doing business as” namesCurrent U.S. addressJurisdiction of formationTax Identification Number (e.g., EIN) Reports must also include the below information about any beneficial owners:

• Full legal name
• Date of birth
• Current address
• Unique identifying number from a valid government ID
• Image of the ID document

5. File your BOI Report

Reports must be filed with the Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Department of Treasury.

Go to website: https://boiefiling.fincen.gov/

Additional Tips for Compliance

• Create a secure process for collecting and storing beneficial owner information.
• Stay informed about any changes in ownership or control of your company.
• Set reminders for filing deadlines and updates.
• Consider seeking legal advice if you’re unsure about your reporting obligations.