For existing businesses, the Corporate Transparency Act (CTA) goes into effect on January 1, 2024, and imposes a brand-new federal filing requirement on most corporations, limited liability companies, and limited partnerships and on certain other business entities.
No later than December 31, 2024, all non-exempt business entities must file a beneficial owner information report (BOI report) with the Financial Crimes Enforcement Network (FinCEN)—the Treasury Department’s financial intelligence unit.
New businesses formed after January 1, 2024, have 30 days to file their initial BOI reports.
Your BOI report must contain all the following information for each beneficial owner:
Full legal name, date of birth, complete current residential street address.
A unique identifying number from a current U.S. passport, state or local ID document, or driver’s license. If the individual has none of these, a foreign passport can be used.
An image of the document from which the unique identifying number was obtained.
The CTA applies only to business entities such as corporations and LLCs that are formed by filing a document with a state secretary of state or similar official. It also applies to foreign business entities that register to do business in the United States.
The CTA does not apply to sole proprietors or general partnerships, in most states. But it does apply to single-member LLCs, even though the tax code disregards such entities and taxes them on Schedule C, E, or F of Form 1040.
The initial BOI report filing does not expire, and you don’t need to renew it. But you have an ongoing duty to keep the BOI report up to date by reporting any changes to FinCEN within 30 days of occurrence.
Failure to comply can result in hefty monetary penalties and up to two years in prison.
We consider the filing of this information with the Financial Crimes Enforcement Network to be legal work and not tax work. Thus, we consider the filing of this information to be outside the scope of our licenses. We recommend anyone who starts a new business in 2024 to engage an attorney for the filing of this information.
