HomeNewsFederal Corporate Transparency Act: New Reporting Requirements for Small Businesses

Federal Corporate Transparency Act: New Reporting Requirements for Small Businesses

The Federal Corporate Transparency Act

On January 1, 2024, the Federal Corporate Transparency Act (the “Act”) went into effect. The Act establishes new requirements under which millions of small businesses must file a Beneficial Ownership Information (“BOI”) Report with the United States Department of Treasure’s Financial Crimes Enforcement Network (“FinCEN”).

Understanding the Act’s Purpose

The Act serves as a crucial anti-money laundering measure, designed to thwart potential bad actors from concealing ownership in entities like corporations and LLCs. By mandating Beneficial Ownership Information (BOI) Reports, the law aims to combat money laundering, tax fraud, and other illicit activities.

Who Must File a BOI Report?

In general, every corporation, LLC, or similar entity created through a filing with a Secretary of State or equivalent body is obligated to file a BOI. Limited exemptions may apply. The article outlines the criteria and conditions that determine whether a business falls within the purview of the reporting requirements.

Filing Deadlines for Domestic Reporting Companies

Domestic reporting companies formed before January 1, 2024, must submit their initial BOI reports by January 1, 2025. For those formed after January 1, 2024, and before January 1, 2025, the deadline is within 90 calendar days of the date of receipt of actual or public notice that formation has become effective.

Filing Through FinCEN

Detailed information is provided on how domestic reporting companies can fulfill their reporting obligations through the U.S. Financial Crimes Enforcement Network. Domestic reporting companies may file their initial BOI reports using the FinCEN system.

What to Do Next?

The complexity of the Act may leave businesses with questions regarding their obligations. Should you have any questions regarding whether you are required to file a BOI or should you require assistance in filing a BOI, please reach out to your representatives. The attorneys at Costello, Cooney & Fearon, PLLC are available to assist you with ensuring compliance with the Act.