How to Comply with the Corporate Transparency Act (CTA) and File Beneficial Ownership Reports for 2024

The Corporate Transparency Act (CTA), effective January 1, 2024, introduces new reporting obligations for many small businesses and LLCs. The act requires entities to disclose details about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN) to fight financial crimes such as money laundering and tax evasion.

Who Must File a BOI Report?

Most domestic and foreign entities doing business in the U.S. must file a Beneficial Ownership Information (BOI) report. Entities required to file include:

  1. Domestic businesses such as corporations, LLCs, and similar entities formed by filing documents with a state or tribal office.

  2. Foreign companies registered to operate in the U.S.

Exemptions

Businesses exempt from filing include:

  • Large operating companies with more than 20 full-time employees, over $5 million in annual revenue, and a U.S.-based office.

  • Self-employed individuals and general partnerships that do not require formal registration.

For more details on exemptions, see the FinCEN Small Business Compliance Guide​.

How to File Your BOI Report

Here’s a step-by-step guide to ensure your business remains compliant:

  1. Gather the Required Information:

    • Company information: Legal name, address, taxpayer ID number.

    • Beneficial owner details: Full name, birthdate, current address, and identifying documents (e.g., driver’s license, passport).

    • Foreign passport holders: If a beneficial owner provides a foreign passport, the information must be updated periodically to ensure accuracy.

  2. Register on the BOSS System:
    Submit your report online through the Beneficial Ownership Secure System (BOSS) available on the FinCEN website.

  3. Meet Key Deadlines:

    • New entities (formed after January 1, 2024): File within 90 days of formation.

    • Existing entities (formed before January 1, 2024): File by December 31, 2024.

    • Changes to ownership information: Update the BOI report within 30 days of the change.

Frequently Asked Questions (FAQ)

1. Does owning a rental property in an LLC require filing a BOI report?
Yes. Each LLC must submit a separate BOI report, regardless of the number of properties it owns​.

2. What happens if my business doesn’t have a physical address?
The report must contain the principal place of business address. A P.O. Box or “in-care-of” address will not be accepted​.

3. What if I don’t have a Social Security number? Can I use a foreign passport?
Yes. However, foreign passport holders must ensure their information is kept up-to-date in the BOSS system to maintain compliance​.

4. What are the penalties for non-compliance?
Failure to file or update a BOI report can result in:

  • $500 per day in civil penalties for willful non-compliance.

  • Criminal fines up to $10,000 or imprisonment for up to two years​.

Why File the BOI Report?

Filing the BOI report is essential to:

  • Avoid heavy fines and criminal penalties.

  • Ensure compliance with evolving laws aimed at combating financial crimes.

  • Help financial institutions conduct customer due diligence with accurate information.

Where to Get Help

For more guidance, visit:

If you’re unsure about your filing requirements, consider consulting a qualified attorney.

Jose Garcia