Changes to Reporting Obligations of Business Entities Effective as of January 1, 2024
Beginning on January 1, 2024, the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury, requires certain domestic and foreign entities, such as single-purpose real estate holding companies, to report the beneficial owners of their entity pursuant to the terms of the Corporate Transparency Act ("CTA"). A beneficial owner is any individual who, directly or indirectly, exercises substantial control over a reporting company or owns or controls at least 25% of the ownership interests of a reporting company.
There are 23 types of businesses that are exempt from the reporting requirements (for example, banks, credit unions, and tax-exempt entities). If an entity is not exempt, they are defined as a Reporting Company and are required to file a report electronically on FinCEn's website (https://boiefiling.fincen.gov). A Reporting Company created or registered to do business before January 1, 2024, will have until January 1, 2025 to file its initial BOI report. Reporting Companies created or registered to do business in 2024 will have 90 calendar days to file a report. A Reporting Company created or registered on or after January 1, 2025, will have 30 calendar days to file. A Reporting Company is obligated to update their reports in the event of a change in beneficial owners. Failure to comply with the reporting requirements can result in material fines and penalties.
If you have any questions about the reporting requirements, please call our firm.