Corporate Transparency Act – Beneficial Ownership Interests Report. You need to register.

Congress has decided that you need to register your corporations, partnership, LLCs, Series, LLCs, LLPs, Partnerships, etc. with the Financial Crimes Enforcement Network (“FinCEN”), Department of Treasury, a bureau of the U.S. Department of the Treasury. See, https://boiefiling.fincen.gov

The Law that requires this is known as the "Federal Corporate Transparency Act" (“CTA”) and it went into effect on January 1, 2024.  Congress enacted it for the purposes of combatting money laundering, tax evasion, and hiding the proceeds of other financial crimes.  

Top level:

Legal entities like corporations, LLCs, partnerships and certain trusts that are created by filing any document with a State or Commonwealth’s Secretary of State (or equivalent) who are not "exempt" and were in existence before January 1, 2024 or were created thereafter have to file an initial report and thereafter continuing reports about who their owners are and who management is, under penalty of perjury with FinCEN and civil penalties and criminal fines and the possibility of criminal prosecution.

If you are a "large operating company" then you are exempt.  A “large operating company” is defined as a legal entity that - 

      A.    has a physical operating presence in the US,

      B.    has more than 20 full-time employees (people working on average at least 30 hours per week) in the US, and,

      C.    has reported more than $5MM in gross income on its federal income tax return for the previous year (i.e., it has actually filed a tax return or an information return with the IRS for 2023).

If your legal entity was created BEFORE Jan 1, 2024, then you have to file an initial report by Jan 1, 2025. If you created a legal entity on or AFTER Jan 1, 2024, then you have to file an initial report within 90 days of the date that the entity was created. Do not wait until December when every other corporation that has procrastinated decides to file.

This is an ONGOING obligation on the part of reporting companies.  If there is any change in or to your "equity ownership," "beneficial ownership," "substantial control," or “management” at any time during 2024 and thereafter, then you'll need to report that within 30 days after a change.  Beneficial ownership and substantial control are each defined terms.

The ownership threshold for persons whose names, SSN, address, and driver's license info (including a photo) need to be provided is 25% whether equity, stock, voting rights, capital or profits interest, scrips, warrants, options, DECS, etc. But being in management as an officer or director requires reporting as does the right to effectively control the legal entity by way of contract rights such the right to appoint directors, etc.

This would also apply to any other legal entity you might own or control unless it is inactive which is of course a defined term.


The good news is that for legal entities that were set up BEFORE Jan 1, 2024, they will not have to file the FinCEN report until January 1, 2025 unless they filed or registered in 2024 and then have had a change in their status during 2024 in which case they have to amend their filing within 30 days.


Penalties.   There are penalties for failure to comply:

Civil penalty of $500 per day for each day that the violation continues; and,

Criminal penalties of imprisonment for up to 2 years and fines up to $10,000.

There is currently no filing fee to file.  FinCEN BOI reporting started on January 1, 2024.

Talk to your attorney about compliance before the deadline(s).