The Corporate Transparency Act (CTA) took effect on January 01, 2024 as a federal effort to reduce unlawful business dealings and affects many Bequest clients, who own or control more than one-fourth of a company’s interest. The Act requires business owners to submit beneficial ownership information (BOI) reports to the Financial Crimes Enforcement Network. Those impacted by the CTA should ensure they are in compliance to avoid potential fines or criminal charges.
Who Is Impacted
The beneficial owner of an existing reporting company or a newly created or registered reporting company will have to file a BOI report to be in compliance with the CTA. A “beneficial owner” of a reporting company is someone who exercises substantial control over the company or someone who owns or controls one-fourth, or more, of the company’s ownership interests.
The CTA applies to domestic reporting companies and foreign reporting companies, including corporations, limited liability companies (LLCs), and other business entities. Domestic reporting companies are formed and registered to conduct business in the United States while foreign reporting companies are formed in another country but registered to conduct business in the United States as a foreign entity.
Information to Report
Within the BOI report, the beneficial owner of a reporting company will provide
1) beneficial ownership information, 2) company information, and 3) company applicant information.
1) Beneficial ownership information includes:
Name, date of birth, address
Identification number from a valid form of identification and the issuer of said identification
Image of above-used identification
This beneficial ownership information must be provided for each beneficial owner. There is no limit on the number of beneficial owners a reporting company can have.
2) Company information includes:
Company’s legal name
Company’s trade name, if any
Address of company’s principal place of business; if principal place of business not in United States, list address used to conduct business in United States
Taxpayer identification number
A company applicant is the person who filed to create a domestic reporting company or register a foreign reporting company to operate in the United States. If multiple people were involved in creating or registering the reporting company, the company applicant is the person most responsible for fulfilling the filing.
3) Company applicant information includes:
Address (use residential address for an individual and business address for person who files in the course of business)
Identification number from a valid form of identification and the issuer of said identification
Image of above-used identification
There can be no more than two company applicants. Additionally, the company applicant information is only required to be filed by a reporting company formed or registered on or after January 01, 2024.
Filing Timeline
The timeline to file varies based on whether a reporting company is an existing company or a newly created or registered company.
Existing Company’s Filing Deadline:
An existing company, created or registered prior to January 01, 2024: must file its initial BOI report by January 01, 2025.
Newly created or registered company, created or registered on or after January 01, 2024, but before January 01, 2025: must file its initial BOI report within 90 days of notification of its formation or registration.
Newly created or registered company, created or registered on or after January 01, 2025: must file its initial BOI report within 30 days of notification of its formation or registration.
Timeline for Updating BOI:
The CTA also provides guidance on updating the information included in a filing and correcting an error in a filing. A company has 30 days within a new development regarding the reporting company or a beneficial owner, to update its BOI report. If there is an error pertaining to beneficial owner information, company information, or company applicant information, a company has 30 days within discovering the error to update its BOI report.
How Bequest Can Help
If you have questions or require filing help, please call or email Bequest today - 404-500-7531 or hello@bequest.law! Bequest will not take proactive steps on behalf of our current or former clients.