Action Required: Meet Your Entity’s Corporate Transparency Act Filing Requirements by December 31, 2024

As follow-up to our ongoing updates, we want to remind you of the upcoming December 31, 2024 deadline under the Corporate Transparency Act (“CTA”). The CTA requires most U.S. entities to file beneficial ownership information (“BOI”) reports with the Financial Crimes Enforcement Network (“FinCEN”). We want to underscore the importance of compliance before year-end: failure to comply could lead to civil and/or criminal penalties.

What is the CTA?

As a brief refresher, the CTA is a new federal law that requires every entity formed or registered to do business in the United States, whether already existing or newly formed, to file a BOI report with the FinCEN listing the entity’s beneficial owners. Exceptions apply to entities that meet certain criteria.

What do I need to do?

You must submit any required BOI reports to FinCEN on or before December 31, 2024.

If you have already filed the required BOI report(s) for your legal entity(ies), or otherwise determined that a particular entity is exempt from filing, no further action is required at this time.

How do I file a BOI Report if I am not exempt?

1. Self-File – You can file BOI reports directly with FinCEN’s BOI E-Filing platform, available at the following link: https://boiefiling.fincen.gov/. There is no fee or charge associated with direct filing.
2. Third-Party Service Provider Filing – There are a number of third-party service providers who offer various levels of assistance with preparing, filing, and monitoring BOI report filings. These third-party providers charge varying fees for assistance. While Bernstein Shur does not endorse the services of any particular third-party service provider, for your convenience, a non-exclusive list of third-party service providers is available here:

• • Carta: The Corporate Transparency Act: Reporting & Compliance (carta.com)
  • Cogency Global: Corporate Transparency Act Resources | Cogency Global Corporate Business Services
  • CSC: Corporate Transparency Act | CSC (cscglobal.com)
  • FileForms: CTA Filing Center
  • Wolters Kluwer/CT Corp: Secure BOI Filing for Corporate Transparency Act Compliance | Wolters Kluwer

How do I know if I am exempt?

Most entities formed or registered to do business in the United States are required to file BOI reports with FinCEN. However, there are 23 exemptions from the filing requirement. You can access the list of exemptions via the link below under “Additional Resources”. Some of these exemptions include large operating companies (entities that employ more than 20 full-time employees in the U.S., are physically present in the U.S., and have reported more than $5M in annual gross revenue for U.S. sources on last year’s last tax return), publicly-traded companies, investment advisers/VC fund advisers, accounting firms, and tax-exempt organizations.

What are the penalties of non-compliance?

Penalties for non-compliance include civil penalties of up to $500 per day for failing to report or for inaccuracies in the BOI reports, and criminal penalties of fines up to $10,000 or imprisonment for up to 2 years for willfully providing false or fraudulent information or for willfully failing to report complete and updated beneficial owner information.

How is Bernstein Shur helping clients comply with CTA?

Our Business Law Practice Group has been closely monitoring the CTA since it was enacted and is ready to assist you. If you have any questions about whether or when you need to file a report, our interdisciplinary business law team is ready to help. Contact your Bernstein Shur attorney or Bryce Morrison at bmorrison@bernsteinshur.com.

Additional Helpful Resources/Quick Links

• Bernstein Shur’s January 8, 2024 summary of what businesses need to know about these new ownership reporting requirements: The Corporate Transparency Act: What Businesses Need to Know About New Ownership Reporting Requirements in 2024
• FinCEN has a robust set of FAQ available on its website at the following link: https://www.fincen.gov/boi-faqs
• Beneficial Ownership Information Report – Filing Instructions (published by FinCEN): BOI Report Filing Instructions (fincen.gov)
• Reporting Exemptions: https://www.fincen.gov/boi-faqs#C_2