Corporate Transparency Act

The Corporate Transparency Act (CTA) aims to increase transparency in businesses to address issues like money laundering and tax fraud. It mandates qualifying entities to disclose ownership details by submitting a Beneficial Ownership Information report (BOI report) to FinCEN.

Who Must File?

All "Reporting Companies," including domestic entities formed by filing with a U.S. state or foreign entities registering to operate in the U.S., must file a BOI report. However, some entities are exempt, such as large U.S. businesses with 21+ full-time employees and tax-exempt entities, subject to additional CTA criteria.

Reporting Deadlines

Companies established or registered before January 1, 2024, must submit a BOI report between January 1, 2024, and January 1, 2025. Those formed after January 1, 2024, must file within 30 days of creation or registration.

BOI Report Contents

Non-exempt Reporting Companies must provide details about the company and each Beneficial Owner—individuals with substantial control or owning/controlling at least 25% of the ownership interest. Required information includes names, current U.S. addresses, jurisdiction of formation/registration, and IRS Tax Identification Numbers (TINs).

Consequences of Non-Compliance

Failure to file a BOI report can result in civil or criminal penalties, with civil penalties reaching $500 per day of non-compliance and potential imprisonment for up to two years and/or fines up to $10,000.

Seeking Guidance

Determining Reporting Company status or identifying Beneficial Owners can be complex and case-specific. For assistance, don't hesitate to contact North Star Law today.