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Corporate Transparency Act: Important Deadlines and Extensions

Discover key corporate transparency act deadlines, important extensions, and compliance tips. Stay informed and ensure your company meets all requirements.

Understanding Critical Corporate Transparency Deadlines

With the enactment of the Corporate Transparency Act (CTA) on January 1, 2024, it is crucial for businesses to understand and adhere to various deadlines to remain compliant. The corporate transparency act deadlines are as follows:

  • Existing Companies: File by January 1, 2025.
  • New Companies Created in 2024: File within 90 days of creation or registration.
  • New Companies Created on or after January 1, 2025: File within 30 days of creation or registration.

Summary of Corporate Transparency Act Deadlines - corporate transparency act deadlines infographic infographic-line-5-steps

The Corporate Transparency Act was created to combat illicit finance and promote financial accountability. By mandating businesses to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), the CTA aims to reduce money laundering, tax fraud, and other financial crimes.

I’m Nischay Rawal, founder of NR CPAs and Business Advisors. With over a decade of experience, I’ve helped numerous businesses navigate complex tax regulations like the corporate transparency act deadlines. Let’s dive deeper into the requirements and how they impact your business.

Key Deadlines for the Corporate Transparency Act

Deadlines for Existing Companies

If your company was created before January 1, 2024, you have until January 1, 2025, to file your initial beneficial ownership information (BOI) report with FinCEN. This applies to all reporting companies, including LLCs, corporations, and limited partnerships.

Reporting companies must disclose details about their beneficial owners. This includes:

  • Name
  • Date of birth
  • Address
  • Identification number from a valid ID (e.g., driver’s license, passport)
  • An image of the ID

FinCEN has made the filing process simple and free of charge. You can find more details in their Small Entity Compliance Guide.

Deadlines for Newly Created or Registered Companies

Companies Created in 2024:

If your company is created or registered in 2024, you have 90 days from the date of creation or registration to file your initial BOI report. This ensures that new businesses quickly comply with the CTA, reducing the risk of illicit activities.

Companies Created on or After January 1, 2025:

For companies created on or after January 1, 2025, the deadline is even tighter. You must file your initial BOI report within 30 days of creation or registration. This quick turnaround aims to capture beneficial ownership information as early as possible in the company’s lifecycle.

To recap the deadlines:

Company Creation DateFiling Deadline
Before January 1, 2024January 1, 2025
During 202490 days from creation
On or after January 1, 202530 days from creation

Failing to meet these deadlines can result in severe penalties, including fines and imprisonment for willful non-compliance. Therefore, it’s crucial to stay on top of these deadlines and ensure timely filing.

For more information on how to file, visit the FinCEN BOI reporting page.

Next, let’s explore the options for filing extensions and what you need to do if your information changes.

Extensions and Updates

Filing Extensions

Understanding the corporate transparency act deadlines is crucial for compliance. But what happens if you miss a deadline? Fortunately, FinCEN has proposed extensions to help businesses adjust.

For companies formed in 2024, the initial filing deadline has been extended to 90 days after receiving notice of their creation or registration. This gives new businesses more time to gather the required information and file their Beneficial Ownership Information (BOI) report.

For companies formed on or after January 1, 2025, the deadline is 30 days from creation.

Update Requirements

Compliance doesn’t end with the initial filing. If there’s any change in your company’s information, you must file an updated BOI report within 30 days of the change. This includes:

  • Changes to beneficial owners: If a new person gains substantial control or a current owner’s information changes.
  • Company details: Any updates to your company’s name, address, or other identifying information.
  • Status changes: If your company becomes eligible for an exemption.

Failing to update your BOI report can result in penalties, so it’s important to stay vigilant.

FinCEN Identifier

To simplify the process, FinCEN offers a unique identifier known as the FinCEN Identifier. This identifier can be used in place of repeatedly submitting the same beneficial ownership information.

Here’s how it works:

  1. Apply for a FinCEN Identifier: Beneficial owners and company applicants can apply for this identifier when they first submit their information.
  2. Use the Identifier in Future Filings: Instead of resubmitting personal details, you can use the FinCEN Identifier in future reports.

This streamlines the process and reduces the burden of compliance.

By understanding these corporate transparency act deadlines and update requirements, businesses can stay compliant and avoid penalties.

Next, let’s dive into the specifics of what information must be included in your BOI report.

Beneficial Ownership Information Requirements

When filing your Beneficial Ownership Information (BOI) report, you need to gather detailed information about both the beneficial owners and company applicants. Let’s break down what you need to know.

Beneficial Owners

Who is a beneficial owner?
A beneficial owner is anyone who:
– Exercises substantial control over the company.
– Owns or controls at least 25% of the company’s equity interests.

What information is required?
For each beneficial owner, you must provide:
Full legal name
Date of birth
Current residential or business address
Identification number from a non-expired U.S. driver’s license, U.S. passport, or other approved document. If none of these are available, a non-expired foreign passport can be used.
Image of the identification document

Identification Documents - corporate transparency act deadlines

Company Applicants

Who is a company applicant?
A company applicant is an individual who directly files the company’s formation or registration documents. If another individual directs or controls this filing, they are also considered a company applicant.

What information is required?
For company applicants, you must provide:
Full legal name
Date of birth
Current residential or business address (if they form companies as part of their business, a business address can be used)
Identification number from a non-expired U.S. driver’s license, U.S. passport, or other approved document. If none of these are available, a non-expired foreign passport can be used.
Image of the identification document

Image Submission

Ensure the images of the identification documents are clear and readable. This is crucial for the verification process.

Filing Process

Submit all required information electronically through the Beneficial Ownership Secure System (BOSS). This system ensures secure and straightforward filing.

By following these steps, you can ensure your BOI report is complete and compliant with the Corporate Transparency Act.

Next, let’s look at the exemptions from reporting requirements.

Exemptions from Reporting

Understanding which entities are exempt from reporting under the Corporate Transparency Act (CTA) can save you time and effort. Here are the key exemptions:

Large Operating Companies

Large operating companies are exempt if they meet three criteria:

  1. More than 20 full-time U.S. employees: These employees must work an average of at least 30 hours per week or 130 hours per month.
  2. Physical office in the U.S.: The company must have a physical office in the U.S. that is not shared with non-affiliates.
  3. Gross receipts or sales over $5 million: This must be reported on a U.S. federal income tax return from the previous year, excluding receipts or sales from outside the U.S.

Public Companies

Public companies are also exempt. These are companies that:

  • Have a class of securities registered under Section 12 of the Securities Exchange Act.
  • Are required to file supplementary and periodic information under Section 15(d) of the Securities Exchange Act.

Investment Companies and Advisers

Investment companies and investment advisers are exempt if they are:

  • Registered with the SEC under the Investment Company Act of 1940.
  • Registered with the SEC under the Investment Advisers Act of 1940.

Venture Capital Fund Advisers

Venture capital fund advisers are exempt if they:

  • Are described in Section 203(l) of the Investment Advisers Act.
  • Have filed the necessary parts of Form ADV with the SEC.

Pooled Investment Vehicles

Pooled investment vehicles are exempt if they are:

  • Operated or advised by exempt banks, credit unions, brokers, or investment companies/advisers.
  • Identified by their legal name in the investment adviser’s Form ADV filed with the SEC.

Subsidiaries of Exempt Entities

Subsidiaries are exempt if they are:

  • Wholly owned or controlled by one or more exempt entities.
  • Not partially owned by an exempt entity; full ownership is required for the exemption.

Other Exempt Entities

There are other entities that are also exempt, including:

  • Banks and credit unions.
  • Insurance companies and certain insurance brokers.
  • Accounting firms registered with the Public Company Accounting Oversight Board.
  • Tax-exempt entities under Section 501(c) of the Internal Revenue Code.
  • Inactive entities that were in existence before January 1, 2020, and meet specific criteria.

These exemptions are essential for understanding who must comply with the Corporate Transparency Act deadlines and who does not.

Next, we’ll dive into frequently asked questions about these deadlines.

Frequently Asked Questions about Corporate Transparency Act Deadlines

When to file the Corporate Transparency Act?

Existing companies that were created before January 1, 2024, must file their initial Beneficial Ownership Information (BOI) report by January 1, 2025. This gives these companies a full year to comply with the new requirements.

Newly created or registered companies have different deadlines based on their formation date. If your company is formed or registered in 2024, you have 90 days from the date of formation to file your initial BOI report.

For companies created on or after January 1, 2025, the deadline is even shorter. These companies must file their BOI report within 30 days of formation or registration.

What is the Corporate Transparency Act 2024?

The Corporate Transparency Act 2024 is a federal law aimed at combating illicit financial activities, such as money laundering and terrorism financing. It requires certain companies to disclose information about their beneficial owners to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

The law targets smaller businesses and entities that have not been subject to such reporting requirements before. The goal is to increase transparency and make it harder for bad actors to hide behind anonymous corporate structures.

Who needs to file a BOI in 2024?

Every “reporting company” must file a BOI report unless they qualify for an exemption.

Existing companies formed before January 1, 2024, need to file their initial BOI report by January 1, 2025.

Newly created or registered companies in 2024 have 90 days from the date of their formation to file. For companies formed on or after January 1, 2025, the deadline is 30 days from formation.

Beneficial owners include individuals who:
– Own at least 25% of the company’s shares.
– Have significant control over the company’s operations.

Understanding these deadlines is crucial for compliance. Missing these deadlines can lead to severe penalties, including fines and imprisonment.

Next, we’ll discuss the beneficial ownership information requirements in detail.

Conclusion

In summary, the Corporate Transparency Act (CTA) imposes strict deadlines for reporting beneficial ownership information to FinCEN. Existing companies must file by January 1, 2025, while newly created or registered companies in 2024 have 90 days to comply. For companies formed on or after January 1, 2025, the deadline is 30 days from formation.

Understanding these deadlines is crucial. Noncompliance can result in hefty fines and even imprisonment. Therefore, meeting these deadlines should be a top priority for any business owner.

At NR CPAs and Business Advisors, we specialize in providing personalized financial guidance to help you stay compliant with the CTA. Whether you need help understanding the reporting requirements or filing your BOI report, our team of experts is here to assist you.

Why Choose NR CPAs and Business Advisors?

  • Personalized Financial Guidance: We tailor our advice to meet your specific needs, ensuring you understand and meet all CTA requirements.
  • Comprehensive Compliance Assistance: From understanding complex regulations to filing necessary reports, we’ve got you covered.
  • Local Expertise: Our local accountants understand your community and provide relevant and effective solutions.

Don’t let compliance stress you out. Trust NR CPAs and Business Advisors to guide you through the complexities of the Corporate Transparency Act.

Get Started Today and focus on what you do best—running your business.

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