New Year, New Rules: The Corporate Transparency Act Demands Full Disclosure As the year winds down and a new one approaches, it’s that magical time again. Resolutions are made, gym memberships spike, and… businesses gear up to reveal their inner workings to the Financial Crimes Enforcement Network (FinCEN).
That’s right—on January 1, 2024, FinCEN introduced the Corporate Transparency Act’s (CTA) Beneficial Ownership Information (BOI) reporting requirements. If you run a business in the U.S., it’s time to unveil who’s really pulling the strings.
Because Uncle Sam isn’t a fan of shell companies being used as personal piggy banks.
But fear not! We’re here to guide you through the BOI maze and ensure your business stays compliant (and out of trouble).
Who Needs to Report? If your business falls under FinCEN’s definition of a “reporting company,” you’re required to comply. This includes Domestic Reporting Companies (U.S.-based businesses, LLCs, and entities formed through state filings) and Foreign Reporting Companies (foreign businesses operating in the U.S.).
Let’s focus on domestic reporting companies for now—local drama always hits closer to home.
The Exceptions (Because We Love a Good Loophole):
Exception 1: Banks, insurance companies, and large operating firms (with over 20 full-time U.S. employees and $5 million+ in receipts) are exempt. They’ve got enough government oversight already.
Exception 2: Inactive companies formed before January 1, 2020, with no business activity, foreign ownership, or recent transactions (over $1,000) are off the hook.
If you’re heavily regulated, making serious money, or running an inactive pre-2020 company, congratulations—you might dodge this. The rest? Buckle up.
Who Qualifies as a Beneficial Owner? If your company doesn’t meet exemption criteria, it’s time to identify the “beneficial owners.”
Anyone who calls the shots (CEO, CFO, COO, or any C-something-O)
Anyone who owns or controls 25% or more of the company
Even if someone doesn’t own shares but runs the show, they count. On the flip side, owning stock or voting rights lands you in the owner’s club, too.
Deadline Details
Existing Businesses (Before Dec. 31, 2023): Companies created or registered before Jan. 1, 2024, must file their initial BOI reports by Jan.13, 2025 (extended from Jan. 1, 2025).
New Businesses (Created in 2024):
Companies registered between Sept. 4, 2024, and Dec. 23, 2024, now have until Jan. 13, 2025, to file their BOI reports.
Companies registered between Dec. 3, 2024, and Dec. 23, 2024, receive an additional 21 days from their original filing deadline.
Starting 2025: Companies registered on or after Jan. 1, 2025, must file their BOI reports within 30 days of their creation or registration becoming effective. No more last-minute scrambles.
What Happens if You Don’t File? Skipping the BOI report isn’t worth the risk. Penalties include:
$500 per day in civil fines
Up to 2 years in prison and a $10,000 fine
(Congratulations, you’ve won an all-inclusive stay at Club Fed, complete with a stylish orange jumpsuit.)
What You’ll Need for BOI Filing:
Full legal names
Residential addresses
Dates of birth
Government-issued IDs (plus a copy)
Bonus Round: Reporting Company Applicants New companies formed after January 1, 2024, must report their “company applicant”—the person who filed the formation documents (yes, that means your lawyer or cousin Vinny gets a shoutout).
Final Thoughts: Don’t Ignore FinCEN We know—government paperwork isn’t thrilling. But with hefty fines on the line, it’s best to handle this ASAP. FinCEN even has a Small Entity Compliance Guide (light bedtime reading, anyone?).
For further details, visit the official FinCEN BOI website and file your report like the responsible business owner you are.
Bonus Round: States Are Getting Involved States like New York are rolling out their own versions of the CTA, focusing on LLCs. California and Massachusetts are following suit.
The sooner you file, the sooner you can focus on running your business—without federal agents or orange jumpsuits in sight.