BOI Report Filing and Compliance

In order to control  businesses that may legitimize various criminal enterprises, including specifically, worldwide terrorism, several years ago Homeland Security was tasked with creating a national database for most businesses in the United States. As a result, the Corporate Transparency Act (CTA)  went into effect January 1, 2024. While there have been challenges to the CTA, the CTA, nevertheless, has the upcoming filing requirements.

Who is required to file a BOI Report?

Unless exempted from the CTA, all domestic and foreign entities registered to do business in the United States, must file.

Who is a “Beneficial Owner”?

A beneficial owner is any individual who:

• Directly or indirectly exercises substantial control over the entity;
• Receives substantial economic benefits from the entity’s assets or operations; and/or
• Owns or controls 25% or more of the ownership interests of the entity.

Such an owner includes a senior officer, or a majority of directors, or an individual who is an important decision maker for the company.

Are there exemptions to this filing requirement?

Currently there are twenty-three types of entities that are exempt from the reporting requirement. These entities include nonprofits, publicly traded companies that meet specified requirements, and large operating companies. Examples include banks, credit unions, accounting firms, insurance companies, brokers, and public utility companies.

What are the filing deadlines?

Currently, the CTA requires that if a business was created or registered  before January 1, 2024, that company has until January 1, 2025, to file its BOI. However, if you have a company that was created or registered on or after January 1, 2024, you have 90 days to file from the effective date of the company.

Failure to not file may result in civil and criminal penalties depending upon whether the failure to file was willful.