NEW CTA LAW: Requires Small Business Ownership Reporting

Filing your BOI Report might seem complex, but we'll break it down into the critical pieces of information. Beneficial Owners are the core of the Report, identifying the individuals with control over your business, as defined by the Corporate Transparency Act (CTA). Gathering this information beforehand can streamline the BOI Report filing process.

Beneficial Owner Details

As discussed in our example for Astor LLC, there are two main ways someone can qualify as a Beneficial Owner:

• Ownership Stake: They directly or indirectly own 25% or more of the ownership interests in your company.
• Substantial Control: They influence your business decisions significantly, even if they don't own a share of the company.

For each Beneficial Owner, you'll need to include:

• Full legal name
• Residential address
• Date of birth
• A unique identifying number like a driver's license or passport number (for U.S. citizens or residents)

Company Information Details

• The legal company name, address, and registered agent information.
• Your company's Taxpayer Identification Number (TIN) is also needed.

Filing Type Clarifies Report's Purpose

• Initial BOI Report (submitted one time)
• Submit a correction
• Updating previously reported information

Company Applicants

For New Businesses Formed After January 1, 2024:

This section identifies the individual(s) who officially formed your business with the Secretary of State or other authority. They could be:

• You (if you formed the business yourself)
• A lawyer or other professional who helped you file the required documents.
• Another individual who took the lead on filing the formation documents.

The deadline for submitting your BOI Report depends on when you formed your business:

• Businesses Established Before January 1, 2024: You must submit your initial BOI Report to FinCEN by December 31, 2024.
• Businesses Established After January 1, 2024: New businesses must file their initial BOI Report within 90 days of receiving state approval for their business registration.
• Keep Your Information Accurate Amended Reports: Over time, circumstances may change. Suppose there's a modification to your ownership structure, or you discover an error in your initial Report. In that case, you must file an amended report with FinCEN. Generally, you have 30 days to submit this update after the change occurs.
  

Thankfully, filing your BOI Report is straightforward. And there's no filing fee involved, making it a budget-friendly step towards compliance.

You can complete it online through FinCEN's secure portal: https://boiefiling.fincen.gov/fileboir.

Two filing options to suit your needs:

• Downloadable PDF: Would you prefer a paper-like experience? You can download a PDF form, fill it out at your own pace, and upload it to the portal.
• Online Form: For a quicker approach, utilize the online form directly within the FinCEN system.

No matter which method you choose, remember to gather the necessary information we outlined earlier (beneficial owner details, company information, filing type, and company applicants for new businesses). Following these guidelines help ensure a smooth and efficient filing process.

While the BOI reporting process is straightforward, it's essential to take it seriously.

The Corporate Transparency Act (CTA) has sharp teeth for non-compliance.

Here's what you need to know:

• Knowingly filing false or fraudulent information or deliberately failing to report or update ownership information is a federal offense, which can result in severe consequences.
• Penalties can be steep. You could face a civil penalty of up to $500 each day you're out of compliance. That can add up quickly!
• In addition to civil penalties, criminal charges are also possible. In the worst-case scenario, you could face imprisonment for up to two years and/or fines reaching $10,000.

Filing your BOI Report by the deadline helps you avoid these penalties and ensures your business operates compliantly. Remember, accurate and timely reporting is vital.

The Corporate Transparency Act (CTA) has changed the landscape of small business ownership. To help simply the process, here's a quick recap we have discussed:

The essential information you need to know as a small business owner:

• Who Needs to File: Most businesses registered in the U.S., including corporations, LLCs, and similar entities, must submit a Beneficial Ownership Information (BOI) Report to FinCEN.
• What Gets Reported: The BOI Report details the individuals with control over your business, including those who directly or indirectly own 25% or more of the company or exercise significant influence over major decisions.
• When to File: The deadline depends on when you formed your business. Existing businesses have until December 31, 2024, to file their initial Report. New companies have 90 days from receiving registration approval. Remember to file amended reports within 30 days of any ownership changes.
• How to File: The BOI Report is conveniently submitted electronically through FinCEN's secure online portal. You can download a PDF form or utilize the online form directly.
• Why Comply? Timely and accurate BOI reporting ensures your business operates compliantly and avoids potential civil or criminal penalties for non-compliance.

Understanding these key points helps your business comply with CTA regulations. If you have further questions, consult a professional advisor or explore the FinCEN BOI resources linked throughout this guide.

At Carolina Business Services, we understand the complexities of new regulations like BOI reporting. As your tax preparation partner, we're here to provide clarity and support. If you face BOI reporting challenges, remember we're just a call away. We are committed to helping you focus on what matters most—running your successful business.