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You might need to file reports revealing the ownership and management of your business if your revenue is under $5 million before January 1, 2025 according to the Corporate Transparency Act.
What is the Corporate Transparency Act?
The Corporate Transparency Act (CTA) is a new law designed to combat illicit activity such as tax fraud, money laundering, and national security risks by compiling specific information about businesses in the United States.
With this new legislation, many businesses must submit a Beneficial Ownership Information (BOI) report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
The BOI must have information regarding the ownership and management of many corporations, limited liability companies (LLCs), and similar entities.
What small business owners need to do:
Business owners who exercise substantial control of their business entity or who own or control at least 25% of ownership interests must submit a BOI.
The BOI requires a variety of components such as identification information of beneficial owners and their company.
Exemptions to the CTA
Though many businesses will require a BOI submission, a handful of companies may be exempt. For example, companies with 20 or more full-time employees, an operating presence at a physical office within the U.S., and more than $5 million in revenue may be exempt. According to the CTA, there are 23 exemptions that may waive a company’s requirement to submit a BOI.
Submitting a BOI
Businesses can submit a Beneficial Ownership Information (BOI) report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
Submit the BOI well before January 1, 2025, to avoid fines and penalties of up to $500 each day the violation continues, imprisonment of up to two years, and/or a fine of up to $10,000.
Need support?
Larson & Gaston, LLP, is well-equipped to identify exempt companies and organize the necessary documents for the BOI report. Need help getting started? Contact us to see how we can support you.