"What the Corporate Transparency Act Means for You"
7/26/20243 min read
Congress enacted the bipartisan Corporate Transparency Act to curb illicit finance. This law requires many companies doing business in the United States to report information about who ultimately owns or controls them in order to make money laundering more difficult. The government began accepting report filings on January 1, 2024. Have you filed yours yet?
Depending on when you formed your business you may have until January 2025 to file the Beneficial Owner Information Report (BOIR), or YOU MAY ALREADY BE OUT OF COMPLIANCE. Being out of compliance can mean civil and criminal penalties, including jail time. Most business are required to file the BOIR. Refer to the Federal Crimes Enforcement Network's (FinCEN) chart to see if you need to file.
There are 23 exemptions to the filing requirement, and unless you meet one of them, your business is considered a "Reporting Company" which must file the BOIR by the deadline or risk being penalized. Be sure to fully understand exemption #23 before you determine your entity is "inactive". Deadlines vary depending on your business incorporation status. While you may not need to file annually, changes to existing business structure may necessitate an additional filing with FinCEN.
Who must file?
Your company may need to report information about its beneficial owners if it is:
a corporation, a limited liability company (LLC), or a company that was created in the U.S. by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
a foreign company registered to do business in any U.S. state or Indian tribe by such a filing.
What if I don't file?
Not filing the BOIR may lead to:
a civil penalty of up to $591.00/day for each day the violation continues; and
a criminal penalty of up to two years imprisonment; and
up to a $10,000.00 fine.
Does everyone have to file?
Who is a "Beneficial Owner"?
A beneficial owner is any individual who directly or indirectly exercises substantial control over a Reporting Company. Someone who owns (or controls) at least 25 percent of the ownership interests of a Reporting Company is also a beneficial owner.
What is an "Ownership Interest"?
Reporting Companies are required to identify all individuals who have at least a 25% ownership interest in the company. The following are some examples of what may be considered an ownership interest: equity, stock, or voting rights; a capital or profit interest; convertible instruments; options or other non-binding privileges to buy or sell any of the foregoing; and any other instrument, contract, or other mechanism used to establish ownership. A reporting company may have multiple types of ownership interests.
How we can help.
Let Rhino Do It.
The Corporate Transparency Act is creating concern among small business owners regarding understanding the Act's provisions and ensuring compliance with them. As a business owner you're invested in doing what you love most, and we're going to guess that doesn't include filing the Beneficial Owner Information Report with the Federal Crimes Enforcement Network.
Rhino Consulting's Better Together initiative brings together small, local businesses to share resources, knowledge, and support. We're more than a networking group, we're your neighbors, friends, and colleagues.
In light of the looming filing deadlines, Rhino Consulting is offering to aid local Upper Valley businesses with their filing requirements. Sure, you could do this yourself, but if you'd like help, we'll file the BOIR on your behalf, for a limited time only.
If you're already a member, reach out to us directly. If you're not a member yet and you'd like to Let Rhino Do It we'd love to have you join the Better Together collective! There's no cost to join and to show our thanks for having you as a member we'll file the Beneficial Owner Information Report for you at no cost. It's Better Together! Click the link below to find out for yourself.
