Do you have a legal entity, such as an LLC, S-Corp, or LP? There is a major change in the law that will impact almost everyone operating a business or non-profit through a legal entity, such as a corporation, limited liability company, cooperative, or a limited partnership.
Effective January 1, 2024, a federal law known as the Corporate Transparency Act ("CTA") will apply to all existing and newly formed non-exempt reporting companies (generally speaking, active businesses with less than twenty employees are not exempt).
When effective:
Any person forming an entity with the Secretary of State of any state on and after January 1, 2024, will have to first determine if the newly formed entity is exempt from the reporting requirements of the CTA and, if not exempt, will be required to file a Beneficial Ownership Information ("BOI") report with the federal Financial Crimes Enforcement Network ("FinCEN").
All entities existing on December 31, 2023, will have to determine whether they are exempt from the reporting requirements and, if not, file a BOI report with FinCEN no later than January 1, 2025.
The CTA and the rules provide certain civil and criminal penalties for Reporting Companies that do not file the BOI reports accurately and timely, and those penalties also apply to any Beneficial Owner that fails to provide accurate and complete personal information for the BOI reports.
Rules further governing the CTA are being finalized by FinCEN. You can find more information at FinCEN's website at www.fincen.gov, including the "Small Entity Compliance Guide." The BOI report calls for factual information regarding ownership and, therefore, like annual reports with the Department of Revenue, would be prepared and filed by the business owner.