What You Need to Know About the Corporate Transparency Act (CTA)

The bipartisan CTA was enacted to squash illicit finance. Although there are limited exceptions, this law will affect most domestic reporting companies (LLCs, Corporations, etc.). Each company must now report its ownership to the government through a Beneficial Owner Information Report (BOI report).

Beneficial Ownership

Who is Considered a Beneficial Owner?

A person will be considered a beneficial owner if:

• They have a major influence on the company's operations and decisions.
• They own at least 25% of company shares.
  
  

And/or

• They have a similar level of control over the company's equity

What Information Does the Beneficial Owner Report?

In the BOI report, businesses must give information about their beneficial owner(s), which includes owners and applicants':

• Names
• Dates of birth (DOBs)
• Addresses
• ID # numbers (from U.S. driver's licenses, Passports, or ID cards)
• Additional Information

Businesses must also report changes in ownership to the government within 30 days of the change(s).

Penalties will apply when businesses fail to satisfy filing requirements, so small business owners must stay aware and informed.

Reporting Timelines

Any businesses operating before January 1st, 2024, have until January 1st, 2025, to file the BOI report.

Businesses formed between January 1st, 2024, and January 1st, 2025, will have 90 days from formation to fill out the BOI report.

All businesses formed after January 1st, 2025, will have 30 days from formation to fill out the BOI report.

Filing is secure and free of charge.

Resources and Documents

The U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) accepts BOI reports. It wants to provide American small businesses with the necessary resources to make filing painless.

Check out their Small Entity Compliance Guide and learn more about reporting at https://www.fincen.gov/boi

Clayton Financial Group is Here to Help

There's much to keep straight when running a small business or investing in one. We want to ensure our clients stay well-informed and know they can contact us with questions.

If you would like further assistance understanding the Corporate Transparency Act or have questions about filing a BOI report, we can help—contact us today.