The Corporate Transparency Act (CTA), enacted on January 1, 2021, aims to combat money laundering and financial crimes. This legislation requires certain businesses and/or legal entities to disclose beneficial ownership information (BOI) in a report to the Financial Crimes Enforcement Network (FinCEN). The compliance requirements went into effect on January 1, 2024.  

What companies are required to file?  

• Domestic Reporting Companies: These include corporations, limited liability companies (LLCs), limited partnerships, or similar entities created by filing a document with a Secretary of State or equivalent office under the laws of a U.S. state or territory. This is not only your tax filing entities but rather all legal entities.
• Foreign Reporting Companies: These are non-U.S. entities formed under the laws of a foreign country but are registered to do business in the United States by filing a document with a Secretary of State or similar office under the laws of a U.S. state, territory, or Indian tribe. 
• Exempt Companies: The legislation provides 23 exemptions from BOI reporting requirements, including but not limited to accounting firms, banks, certain financial institutions, certain tax-exempt entities, and large operating companies. Large operating companies are defined as those that meet all of the following requirements and are, therefore, exempt from BOI reporting:
  • Employ more than 20 full-time employees in the United States and
  • Have an operating presence at a physical office in the United States and
  • Reported gross receipts of over $5 million on the previous year's federal income tax or information return  

Who qualifies as a beneficial owner?  

A beneficial owner is typically an individual who either directly or indirectly possesses significant control or owns at least a 25% stake in a reporting company.   

What information is required to file?  

The reporting company will need to provide the following information for each beneficial owner:  

• Full legal name
• Date of birth
• Current address
• Unique identifying number from an approved ID such as a driver’s license or passport
• An image of their government-issued photo ID  

The company will also need to provide their legal name and any trade name, current address, jurisdiction of formation or registration, and taxpayer identification number.  

When is the deadline to file?  

• Companies registered or created BEFORE January 1, 2024: Must file the initial report by January 1, 2025. 
• Companies registered or created AFTER January 1, 2024: Must file within 90 days of registration. 
• Companies registered or created AFTER January 1, 2025: Must file within 30 days of registration.  

There is no annual filing requirement after the initial report is submitted. However, if there are changes to the information included in a previously filed BOI report, an updated report must be filed within 30 days of the change.   

The CTA imposes severe penalties for non-compliance of up to $500 per day, capped at $10,000. Reporting companies are responsible for filing this information on FinCEN’s BOI e-filing website. There is no fee to file BOI reports. We recommend consulting with your attorney before filing.  

Beware of Scams 

FinCEN and the Better Business Bureau have issued warnings to the public about scams related to this reporting. You may be targeted by emails or mailings – do not respond or click on any links or QR codes.  

FinCEN will never reach out requesting information for your CTA filing. You are the one required to complete the filing online, and there is no filing fee for submitting a report to comply with the CTA. 

View an example of a recent mailing here. 

Seek Professional Advice  

We strongly recommend consulting your attorney to discuss the CTA and any reporting obligations you may have. Lutz can provide tax and other information to assist your legal counsel, but we cannot prepare BOI reports required by the CTA. If you have questions, please refer to our BOI page or contact your Lutz representative.