Corporate Transparency Act Compliance Alert
NSSF® is sending this alert to ensure that members are aware of the upcoming reporting deadline under the Corporate Transparency Act (CTA).
The CTA requires almost all businesses in the United States to file a beneficial owners report (BOI Report) with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department. The deadline to file your BOI Report is January 1, 2025.
NSSF Members are advised to ensure they are aware of the requirements of the CTA, and to make the necessary reports before the applicable deadlines. Provided below is a summary of the Act’s key requirements, as well as helpful resources for those seeking additional information, and links to the FinCEN report filing portal.
Who must report?
Reporting companies are most all corporations, LLCs, partnerships, and similar entities that are either formed or registered to do business in the United States (including foreign incorporated entities).
There are 23 categories of organizations which are exempt from filing a BOI report, however these exemptions are unlikely to apply to the majority of NSSF members.
What must be reported?
BOI Reports specifically require reporting companies to provide certain information on the company and two categories of individuals: “beneficial owners” and “company applicants”. Information on beneficial owners is required for all filers, while information on company applicants is not required for reporting companies organized prior to 1/1/2024 (or registered to do business in the US before 1/1/2024, if a foreign entity).
Beneficial owners are individuals who exercise substantial control over a reporting company OR own or control at least 25 percent of the ownership interests of the company. Certain exceptions to who qualifies as a beneficial owner also exist. Company applicants are the individuals who directly filed a reporting company’s registration/incorporation documents, or who directed or controlled that activity. Further guidance on the definitions of “beneficial owners,” “company applicants,” “substantial control” and “ownership interest” can be found in the FinCEN Small Entity Compliance Guide.
The information required for reporting is as follows:
- Reporting Company Information
- Full Legal Name
- Trade Name(s)
- Current US Address o Jurisdiction of Formation
- TIN/EIN
- Beneficial Owners and Company Applicants
- Full Legal Name
- Date of Birth
- Current Address
- Proof of ID in acceptable form
When must reports be made?
Organizations are required to file an initial BOI report with FinCEN:
- (1) by January 1, 2025, for organizations existing prior to January 1, 2024,
- (2) within 90 days of establishment for organizations formed in 2024, OR
- (3) within 30 days of establishment for organizations formed on or after January 1, 2025.
Following the initial report, subsequent reports are only required if there is a change in any of the reported or reportable information (i.e., a change in beneficial ownership of an organization, change of address, etc.), in which case such reports must be filed within 30 days of such change. Changes in the personal information of company applicants do not require an updated report.
Where to File?
FinCEN has created a portal for organizations to file their required reports online. This portal can be found here.
What happens if you don’t file?
Civil and criminal penalties can apply to violators who do not file BOI reports on time, or who file false or fraudulent reports. The Act provides for civil penalties of up to $500/day for unremedied violations (up to $10,000), and criminal penalties of up to $250,000 and 5 years of imprisonment.
More Information and Resources
FinCEN has published a number of helpful resources regarding CTA compliance and filing assistance, which can be accessed through the below links. If members have any questions regarding how to comply with or interpretation of the CTA, they are advised to seek independent legal advice or contact FinCEN directly.
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