Edward H. Zebersky
Zeb Law
1895 Tyler St, Suite 301
Hollywood, FL 33020
Table of Contents
As the deadline approaches for submitting your FinCEN Beneficial Ownership Information (BOI) report, it’s crucial to understand the importance of compliance. Missing the submission deadline or providing inaccurate information can lead to severe penalties.
Understanding the Corporate Transparency Act (CTA) Requirements
The Corporate Transparency Act (CTA), which went into effect on January 1, 2024, was enacted as part of the Anti-Money Laundering Act of 2020. This legislation includes significant updates aimed at combating money laundering, tax fraud, and the financing of terrorism. Under the CTA, every “reporting company” must submit a beneficial ownership information (BOI) report to the U.S. Financial Crimes Enforcement Network (FinCEN).
What is a Reporting Company Under the CTA?
A reporting company is defined as a corporation, limited liability company, partnership, or other entity that:
- Is created by the filing of a document with a secretary of state within the United States, or
- Is formed under the law of a foreign country and registered to do business in the United States by filing a document with a secretary of state.
The following chart shows how to analyze whether your company is a “reporting company”:
Exemptions from FinCEN BOI Reporting
Certain types of companies are exempt from the CTA’s BOI reporting requirements. Exemptions typically apply to highly regulated entities such as banks, insurance companies, or certain public companies. FinCEN has published information on its frequently asked questions page that may help determine whether your company is exempt.
Key Timelines, Deadlines and Penalties for FinCEN BOI Reporting
The CTA outlines strict timelines and penalties for non-compliance with BOI reporting requirements:
Civil Penalties:
Willfully failing to submit your report can result in civil penalties of up to $500 per day for each day the violation continues. Adjusted annually for inflation, the current penalty stands at $591 per day.Criminal Penalties:
In addition to civil penalties, willful violations can lead to criminal penalties, including up to two years of imprisonment and fines of up to $10,000. Violations include failing to submit a beneficial ownership information report, submitting false information, or failing to update previously reported information.
Submission Deadlines
To avoid these penalties, it’s important to adhere to the following deadlines:
- Entities Formed Before January 1, 2024: These entities must submit their initial report by January 1, 2025.
- Entities Formed On or After January 1, 2024: These entities must submit their initial report within 90 calendar days after receiving public notice of their registration.
