Effective January 1, 2024, the new Corporate Transparency Act requires existing companies to report information about the individuals who own or control the company by December 31, 2024. New companies created or registered after January 1, 2024, must report this information within 90 calendar days of your company’s creation or registration.
There are many exceptions to the reporting requirements. Two of the exceptions that may more commonly apply are:
- Large Companies. Companies with: (a) more than 20 full-time US employees, (b) an operating presence at a physical office within the US, and (c) more than $5,000,000 of US-sourced gross receipts reported on its prior year federal income tax return; and
- Inactive Companies. Companies: (a) in existence before 2020, (b) not engaged in active business, (c) not owned by a foreign person, (d) not having changed ownership in the preceding 12 months, (e) not having sent or received funds in excess of $1,000 in the preceding 12 months, and (f) not holding any type of assets.
You may file the necessary information to comply with the Act. It is free to file online via the FinCEN website.
Alternatively, you can hire our office to complete that filing.
If we undertake the filing, we will need the tax identification number for the company and copies of driver’s licenses or passports for every owner holding at least 25% of the ownership and every person who exercises substantial control over the company. Senior officers (president, CEO, CFO, and any other officer who performs a similar function) are automatically deemed to have substantial control, even if they have no actual ownership in the company.
If there is a change to previously reported information about the company or its beneficial owners, an updated report must be filed within 30 days of the change. This includes address changes, owners or substantial control changes, and new IDs or passports issued to owners. So, it is imperative that your company implement a system to identify reportable changes and file an updated report in a timely manner.
The penalties for willfully failing to file both initial or updated reports are steep -$500 for every day that the report is late (up to $10,000) and imprisonment for up to two years.
We will not prepare the filing or proceed further regarding this deadline until you have made arrangements with our office to do so. Our fee for the initial report is $375 per report plus $50 per beneficial owner.
Please contact us at info@ellingsoncpas.com if you have questions regarding the application of these filing requirements to your company.
Links to resources:
FINCEN Website to file: Beneficial Ownership Information Reporting | FinCEN.gov
FAQs regarding filing requirement: https:/www.fincen.gov/boi-faqs
BOI Small Entity Compliance Guide: https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf