November 5, 2024

The Corporate Transparency Act (the “CTA”), effective January 1, 2024, is a new federal law that requires many small businesses to make informational filings with the U.S. Treasury Department’s Financial Crimes Enforcement Network(“FinCEN”). We wanted to make you aware of a few key points on the CTA. Additionally, please contact us at CTA@rezlegal.com with any questions.

  1. Mandatory Reporting: You must file a Beneficial Ownership Information (“BOI”) report with FinCEN if your business is considered a “reporting company.” This includes certain domestic and foreign-registered corporations and limited liability companies formed or registered in the US.
  2. Identifying Beneficial Owners: A “beneficial owner” is someone with 25% or more ownership or control of your business, or someone exercising substantial influence over the business. You must report their name, date of birth, address, and a government-issued ID number.
  3. Filing Deadlines: If your business was formed on or after January 1, 2024, you must file the BOI report within 90 days of its formation. For businesses formed prior to January 1, 2024, the filing deadline is December 31, 2024.
  4. Updates: When any information reported on a BOI report changes, you must file an updated BOI report within 30 days of the date the change occurred.
  5. Penalties for Non-Compliance: Failing to file or providing false information could result in civil penalties of up to $10,000, and criminal penalties including fines and prison time.
  6. Your Information: This information will be stored in a non-public FinCEN database accessible only to law enforcement and authorized government agencies for investigations related to national security, terrorism, and financial crimes.
  7. BOI Filings: You can file your BOI report directly through FinCEN. Alternatively, there are various third-party providers that host platforms for submitting BOI reports, including CT Corporation and First Coast Corporate Services. For a potential discount on your BOI filing with First Coast Corporate Services, please contact Matt Knight at mknight@firstcoastcorp.com. Please note that our firm is not filing any BOI reports.
  8. Constitutional Challenge: A U.S. District Court Judge in Alabama ruled that the CTA is unconstitutional. The relief granted by the court, however, was limited to the plaintiffs in that case. Accordingly, it appears that other parties should still comply with the CTA until further notice.
  9. Further Questions: If you have any questions about the process or information that is required to be reported, please contact us at (904) 638-1085 or CTA@rezlegal.com.