The Corporate Transparency Act (CTA) is upon us.
The CTA took effect on January 1, 2024.
This article is for educational purposes only and does not constitute legal advice in any way.
The Corporate Transparency Act (CTA) is upon us. It took effect on January 1, 2024, and imposes a new federal filing requirement for most corporations, limited liability companies (LLCs), and other business entities.
Corporations, LLCs, and other entities subject to the CTA are called “reporting companies.” People who form new reporting companies must file a beneficial ownership information (BOI) report with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) within 90 days of forming the company.
The owners of reporting companies created before 2024 must also file a BOI report, but they have until January 1, 2025 to do so (to be safe, treat it as December 31, 2024).
The owners of reporting companies created BEFORE 2024 must also file a BOI report
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The owners of reporting companies created BEFORE 2024 must also file a BOI report 〰️
Some businesses are exempt from filing—for example, large operating companies with over 20 employees and $5 million in income. There are other, more narrow exemptions as well.
The BOI report must contain the name, the birth date, the address, and an ID number and image of that ID for each “beneficial owner” of the reporting company. These are the human beings who (1) own or control at least 25 percent of the company or (2) exercise “substantial control” over the company.
The BOI report is filed online at a new federal database called BOSS (an acronym for Beneficial Ownership Secure System). There is no filing fee.
Government law enforcement and security agencies will use the data from BOI reports to help combat money laundering, tax evasion, terrorism, and other crimes. It will not be available to the public.
Naturally, people have lots of questions about the BOI report filing requirements — for example, according to FinCen:
Do you have to file a BOI report if you own a single rental property in an LLC? Yes.
Do you have to file 10 BOI reports if you own 10 LLCs? Yes.
Can certified public accountants, enrolled agents, and other non-attorney professionals file BOI reports for clients without running afoul of unauthorized practice of law rules? Unclear…see below for Pathway’s official statement.
Are registered agents responsible for filing the BOI report? No, consult your attorney.
Do sole-proprietors have to file? No.
Do I need to list a street address in the BOI report? Yes.
Do I need to list my Social Security number in the BOI report? No, as of 02/01/2024.
Do I need to list my attorney in the BOI report? Maybe…consult with your attorney.
Must I file an updated BOI report if a beneficial owner leaves the company? Yes, consult with your attorney.
Will criminals file BOI reports? Yes/No/Probably/Who knows?
Official Statement of Pathway CPA Group LLC regarding BOI Reporting
All information regarding BOI mentioned by Pathway CPA Group LLC is for educational purposes only and in no way constitutes legal advice. We are not attorneys. The BOI Reporting laws are a legal matter, not a tax matter.
Pathway CPA Group LLC will not provide support to clients or non-clients in BOI Reporting. Our attorneys and business insurance policies believe that BOI Reporting falls outside of the licensed and insured activities of a CPA. We strongly encourage our clients and the public to consult a qualified business attorney regarding any BOI-related questions, concerns, or filing guidelines.
Refer to the official FinCen government website for detailed information about BOI reporting: www.fincen.gov/boi
