Corporate Transparency Act Rolls Out New Requirements

Reporting Companies Urged to Take Swift Action to Comply

As part of our commitment to ensuring your business remains ahead of regulatory changes, we want to draw your attention to the Corporate Transparency Act (CTA). This act mandates that corporations, limited liability companies (LLCs), and similar entities report specific information to the Financial Crimes Enforcement Network (FinCEN). 

Additionally, we want to clarify that our firm, like many in the legal industry, does not directly manage CTA filings. However, should you have any questions or concerns, we are fully prepared to offer legal advice on how the CTA affects your business and the best ways to navigate its requirements. 

The CTA took effect on January 1, 2024

Entities Formed Before January 1, 2024: You have until January 1, 2025, to submit your required filings to FinCEN.

Entities Formed After January 1, 2024, but Before January 1, 2025: You have 90 days from formation to submit your required filings to FinCEN.

Entities Formed on or After January 1, 2025, will have 30 days from formation to submit your required filings to FinCEN.

This is a strict deadline. Failure to comply may result in penalties.

This email serves as a guide outlining the critical elements of the CTA, including preparation steps, recommended services for managing your compliance filings, and essential actions to ensure adherence to these new regulations. 

Preparation 

All companies should determine if they are reporting companies. 

If you are a reporting company required to file a BOI report, you may obtain a FinCEN ID.

Why Do I Need a FinCEN ID?

  • A FinCEN ID for your Beneficial Ownership Information (BOI) reports streamlines the process significantly. 
  • With a FinCEN ID, there is no need to re-enter certain personal details for each report you submit. This not only saves time but also enhances data consistency and security, making your compliance journey smoother and more efficient
  • NOTE: An individual or reporting company is not required to obtain a FinCEN ID.

How To Create a FinCEN ID?

  1. Go to Create an account | Login.gov and create a login.gov account and sign in through login.gov. 
  2. After signing in to login.gov, access the FinCEN ID application here: FinCEN ID | Financial Crimes Enforcement Network (FinCEN).
    • Be prepared to have these items handy:
      • U.S. passport;
      • An identification document issued by a State; or
      • State-issued driver’s license.

Filing a BOI Report

The filing for CTA compliance can be completed either (1) electronically through FinCEN’s secure filing system available via BOI E-FILING (fincen.gov) which may be most suitable for one-time filers, or (2) through a third-party service provider, recommended for entities with more complex needs or those requiring multiple filings

To assist you in this process, we have reviewed several third-party CTA compliance services. As of now, we believe FinCEN Reporting Company is the most client friendly.

1. FinCEN Reporting Company, Home – Reporting Service for CTA Compliance – FinCEN Report

FinCEN Reporting Company offers a subscription-based service, accessible through an easy-to-use online platform. Here is what makes it client-friendly:

  • Simplified Process: Once you sign up, the platform guides you step-by-step to upload the necessary documents. You do not have to worry about missing anything; the system leads you through each part of the filing.
  • Direct Filing to Government: After you complete your part, FinCEN Reporting takes over. They will send your filing directly to the relevant government office, ensuring everything is in order.
  • Ongoing Compliance Support: You might need to file additional reports to account for changes in the business. FinCEN Reporting Company covers this in their service, so you are always up to date with compliance.

2. FincenFetch, Collect and File – FincenFetch. A second service we recommend. 

FincenFetch offers a subscription-based service, accessible through an easy-to-use online platform. The only difference is our firm will receive 5% of the fee from the service provider for every customer that chooses its services.

Deadlines

The compliance deadlines vary by your entity formation date. 

  1. Existing Entities: Any domestic Reporting Company established before January 1, 2024, are required to submit their reports to the FinCEN by no later than January 1, 2025.
  2. New Entities: For any domestic Reporting Company formed after January 1, 2024, it is mandatory to file a report within ninety (90) calendar days
  3. New Entities on or after January 1, 2025: For any domestic Reporting Company formed on or after January 1, 2025, it is mandatory to file a report within thirty (30) calendar days.
  4. Updates/ Corrections: After the initial filing, there is no annual or quarterly filing requirement; however, reporting companies must correct inaccurate information previously filed within 30 days of discovering the error. 
  5. Failure To Comply may bring a fine of $500/day and/or a possible felony with up to 2 years in prison.

Questions?

For more information, please contact a member of our Corporate / Securities team and visit Corporate Transparency Act – Beneficial Ownership Information Reporting — Fortis Law Partners LLC.

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