Unveiling the Corporate Transparency Act: A Guide to Beneficial Ownership Reporting

Written by HoganTaylor | Jan 19, 2024 9:28:25 PM

Are you aware of a recent filing requirement regarding Beneficial Ownership Information? You likely have a new filing requirement under a new federal law that comes with significant penalties if you fail to file as required. Let's explore the new law and your filing options.

The Corporate Transparency Act

The Corporate Transparency Act (“CTA”) was enacted into law as part of the National Defense Act for Fiscal Year 2021. The CTA requires the disclosure of identifying information on the “beneficial owners” of certain entities. Beneficial owners are individuals that own or control 25% of the entity and others that exercise significant control of the entity. The information to be submitted is collectively known as “beneficial ownership information” or “BOI”.

The CTA is not a part of the tax code. Instead, it is a part of the Bank Secrecy Act, a set of federal laws that require record-keeping and report filing on certain types of entities. The intent of the law and the BOI reporting requirement is to help US law enforcement combat money laundering, the financing of terrorism and other illicit activity. 

Generally, corporations, LLCs (including single-member) and limited partnerships are required to file but there are a few limited exceptions. For reporting entities that were in existence as of 1/1/2024, an initial filing is required by 1/1/2025. After the initial filing, only updates are required when certain information changes. Please consult your legal advisor regarding entities created after 1/1/2024.

Primary filing options

Option 1: If you would like a guided experience in filing, help in securely obtaining identity documents (DL or Passport) from your beneficial owners or anticipate frequent changes that have to be reported; talk with an advisor about utilizing a service specializing in BOI reporting to help ease the filing burden in complex scenarios. 

Option 2: If you do not need the guidance or document collection capabilities of the filing service, you may file directly, and at no cost, with the Treasury Department at https://www.fincen.gov/boi. You can either complete the form online or complete and upload a PDF version of the report that you can find on the FINCen website. 

Option 3: Contact the attorney who set up your entities for assistance with the filing. 

If you would like additional advice regarding your filing circumstances, please reach out to a HoganTaylor advisor with any questions.

For an introduction into Beneficial Ownership Information Reporting, download the guide below. 

 

About HoganTaylor

HoganTaylor LLP is one of the largest business advisory and public accounting firms in Oklahoma and Arkansas. The Firm has more than 300 employees and provides tax, assurance, risk, business advisory, accounting, technology and many specialty and industry-focused services. HoganTaylor is an independent member firm of PrimeGlobal, one of the five largest associations of independent accounting firms in the world. 

INFORMATIONAL PURPOSE ONLY. This content is for informational purposes only. This content does not constitute professional advice and should not be relied upon by you or any third party, including to operate or promote your business, secure financing or capital in any form, obtain any regulatory or governmental approvals, or otherwise be used in connection with procuring services or other benefits from any entity. Before making any decision or taking any action, you should consult with professional advisors.