What it is: 

The Corporate Transparency Act was passed by Congress in 2021 as part of the National Defense Authorization Act and is regulated by FinCEN. It mandates that millions of new, and established, businesses must submit beneficial ownership information with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).  The goal of this legislation is to help the Department track illicit activities like money laundering and tax evasion by gathering information on ownership of U.S. businesses.

Who it Affects:

All Limited Liability Companies (LLCs), Corporations (C and S Corps) and other entities required to file with the Secretary of State (known as Reporting Companies) must register with FinCEN.

Exemptions:

Sole Proprietors, Large Operating Companies, Publicly Traded Companies, and companies not formed by filing with the Secretary of State are exempt from filing requirements.  These exempt company types have other reporting requirements which fulfill these same purposes.

Other examples of exempt companies include insurance companies, trusts, investment companies, accounting firms, public utilities, securities brokers or dealers, credit unions,  banks, and tax exempt companies (501c), among others. Keep in mind, that if you are a tax exempt company, that you must register for the time between your organization and the approval of your tax exempt status. See here for a full list of exempt company types: https://www.fincen.gov/boi-faqs#B_1

What is Required:

All Reporting Companies must register ownership information with FinCEN.  All owners who exercise substantial control over the company and owner at least 25% of that company’s ownership interests must be reported.

In addition, the individual filling out the application must also provide personal details to FinCEN.

There is no fee to file.

An individual has Substantial Control if they are a senior C level officer, general counsel, has authority to appoint or remover directors, is an important decision maker or other type of substantial control over the company.  Ownership Interest can be established if they own shares in the company, own stock, have voting rights, ownership rights in the profits of a company or any option or privilege to buy or sell stock or equity int eh business or any other contract rihts or other arrangement to establish ownership.

When to File:

If your company was in existence before January 1, 2024 then you have until March 21, 2025 to register the company.

New Companies filed on or after January 1, 2024 but before January 1, 2025 must register the Beneficial Ownership Information (BOI) within 90 calendar days after the company’s creation.

For New companies filed on or after January 1, 2025 the reporting period will be only 30 days after creation.

Any information that is changed from the original BOI reporting must file an updated BOI  within 30 days of the change.

There is not an annual reporting requirement, only when there are changes or corrections should any further BOI information be reported.

Privacy Concerns:

The information reported on the BOI to FinCEN is NOT being made public.  It is for use by certain government agencies and law enforcement for national security and intelligence purposes only, as well as to allow certain financial institutions to complete its reporting obligations.

Information to Gather Before Filing:

Company Information

• Company’s Legal Name
• Trade Names or DBAs
• Principal Business Address (PO Box is not Acceptable)
• Jurisdiction of Formation (State Where Formed)
• EIN (Tax Identification Number)

Beneficial Owner Information

• Full Name
• Date of Birth
• Residential Address
• Copy of Passport or Driver’s License (non-expired) or other government issued ID

Company Applicant

• Full Name
• Date of Birth
• Residential Address
• Copy of Passport or Driver’s License

Penalties for Not Filing:

There are hefty fines including civil and criminal penalties for failing to file or filing false information, including up to $500 for each day that the violation continues, up to 2 years of imprisonment and a fine of up to $10,000.

Are you overwhelmed or just need someone to take care of this for you, file it correctly and not cost you an arm and a leg?  Contact us and we’ll help you!

Let AMC Legal file for you and keep your business in compliance!  Call 630-590-3640 or email allison@amclegal.net to get your business filed right away. (Current clients or Illinois businesses only).