The Legal Brief

Corporate Transparency Act Deadline Approaching Fast

October 1, 2024

By: Stephanie R. Renner

The deadline for existing companies to comply with the Corporate Transparency Act (“CTA”) is coming up quickly and it is important that you assess your company’s obligations under the Act as soon as possible. Unless it qualifies for an exemption, any entity created by submitting a filing with a Secretary of State or a comparable governmental agency must file a Beneficial Ownership Information Report (“BOIR”) with the Financial Crimes Enforcement Network (“FinCEN”). Existing entities formed prior to January 1, 2024, must file this report before January 1, 2025. 

Required Information

Our previous article detailing the requirements of the CTA can be found here, but as a reminder, there are three categories of information that must be included in the BOIR – information about the Reporting Entity, the Beneficial Owners, and for the initial filing for new entities formed after January 1, 2024, the Company Applicant. 

The BOIR must contain the following information about the Reporting Entity:

• The full legal name of the reporting company,
• Any trade names or DBAs,
• A complete current address,
• The state of formation of the company, and
• The company’s taxpayer identification number.

The BOIR must contain the following information about each Beneficial Owner and Company Applicant:

• The full legal name of the individual,
• Their date of birth,
• Their complete current address,
• A unique identifying number from an acceptable identification document such as a driver’s license or passport, and
• An image of the document showing the unique identifying number.

Reporting Deadlines

The deadline for filing a BOIR is dependent on the formation date of the Reporting Entity.

• New Reporting Entities formed after January 1, 2024, must file their BOIR within 90 calendar days of registration of formation of the business (this time will be reduced to 30 days after January 1, 2025).

• Existing Reporting Entities formed before January 1, 2024 are required to file their BOIR no later than January 1, 2025.

FinCEN Resources

FinCEN has several resources available to assist businesses with CTA compliance.  These include:

• The Small Entity Compliance Guide.  A 57-page guide designed to help small businesses with CTA Compliance.
• Frequently Asked Questions.  A list of commonly asked questions with answers that is periodically updated by FinCEN
• Quick Reference Brochures.  Simple reference brochures with basic information about CTA requirements.

Special Considerations

It is especially important that entities with multiple owners, subsidiaries or affiliates, and/or complicated ownership structures consult their legal advisors regarding the requirements of the CTA.  At least 2 elements of the CTA can be complex in these situations:

• Exemptions.  There are 23 types of entities exempt from the reporting requirements of the CTA.  These include large operating companies, entities meeting the implementing regulation’s definition of “inactive,” tax-exempt entities, certain public companies, and other businesses that are subject to federal reporting requirements like banks, insurance companies, and certain public accounting firms.  FinCEN’s Small Entity Compliance Guide is helpful for companies determining whether they qualify for one of these exemptions, but some of the exemptions, like the one for large operating companies, require close analysis.

• Beneficial Ownership.  The definition of “Beneficial Owner” is not necessarily intuitive and includes individuals and entities that do not actually have any ownership in the reporting company.  A close examination of roles in the Reporting Entity and the company’s decision-making structure is required to ensure that all Beneficial Owners are properly reported.

The reporting deadline for existing entities is coming up very soon and our lawyers at Jackson Kelly PLLC are ready to help you analyze your entity’s corporate and governance structure, document your decisions regarding exemptions and beneficial ownership (and other elements of the CTA), and meet your compliance obligations. If you would like to discuss how we can help, please reach out to Stephanie Renner, Justin Johnson, or your primary Jackson Kelly contact.