It’s for our own good, so listen up now or pay up later.
The Corporate Transparency Act (CTA) is now in full effect, and it’s crucial for business
owners and financial institutions to understand the upcoming deadline to avoid big fines
and even jail time.
By the end of 2024, all businesses—LLCs, corporations, and other entities—must file a
Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement
Network (FinCEN). Failure to do so will result in severe financial penalties I’ve outlined
below.
The CTA aims to curb money laundering, tax evasion, and other illegal activities by
increasing transparency in business ownership. Unfortunately, this new law impacts a
wide range of entities, including many that may not be aware they are required to file.
This article outlines the steps business owners and banks must take to ensure
compliance and avoid costly mistakes.
Who Needs to File?
The Corporate Transparency Act applies to any business entity filed with a Secretary of
State’s office, including LLCs, corporations, limited partnerships, and others. If your
business was created before January 1, 2024, you must file your BOI report by
December 31, 2024. If your entity was formed after January 1, 2024, you have 90 days
from the date of formation to file.
There are some limited exemptions, but they are rare and complex. We strongly
recommend consulting your attorney or CPA to ensure you do not miss this critical filing.
What Are the Penalties?
If you fail to submit the BOI report by the deadline, you could face a $500 fine for each
day the report is late, up to a maximum of $10,000, and potentially two years in jail for
serious violations. These penalties are non-negotiable, and dealing with the federal
government on these matters is often challenging. The earlier you take action, the
better.
Steps to Take Now
Identify Beneficial Owners: Determine the individuals who own more than 25% of your
business or exercise significant control, such as board members or officers.
Consult with Professionals: Reach out to your legal or financial advisors to guide you
through the filing process. The Corporate Transparency Act’s rules can be complex, and
it’s vital to ensure all details are accurate and submitted on time.
File Your BOI Report: Submit your BOI to FinCEN as soon as possible. If you have
recently formed your business, you have 90 days to comply, but don’t wait until the last
minute.
Failing to act could result in serious consequences. If you’re unsure about your
obligations under the Corporate Transparency Act, consult with professionals today. It’s
far better to take the time now than to risk substantial fines or jail time later.
For more information, feel free to reach out to legal experts who specialize in business
law and compliance, or visit the FinCEN website for further details on how to file.