The Corporate Transparency Act - Beneficial Ownership Information Reporting Requirements

The Corporate Transparency Act (CTA) was enacted into law in 2021. It requires the disclosure of beneficial ownership information (BOI) for most business entities regarding the ownership and control of the entity. These requirements went into effect on January 1, 2024. At CMP, we are prepared and able to help our clients navigate these new requirements to ensure compliance.

Who is Required to Comply with Beneficial Ownership Information?

Entities organized both in the U.S. and outside the U.S. may be subject to the reporting

requirements. This would include LLCs, Single-Member LLCs, Limited Partnerships, Corporations, S-Corporations, or other similar entities that are established with a secretary of state or office under law. There are 23 types of entities that are exempt from filing, but the exemption will not apply to most entities. CMP is ready to provide you with additional details on those exceptions in helping you determine if your business qualifies.

Who is a Beneficial Owner?

Beneficial owners are typically classified as individuals (or sub-entities) that meet either of the following criteria:

Directly or indirectly own at least a 25% interest in a business entity
Exercise substantial control over a reporting company

What Information is Required to be Reported?

Each business entity must report the following information:

Full legal name (and any DBA) of the business
Address
State of formation
EIN/ITIN

Additionally, the business entity must report the following information on each of its beneficial owners (individual or entity):

Name
Birthdate
Address
Copy/image of a unique identifying number and issuing jurisdiction from an acceptable identification document (generally required to be a drivers license or a passport)

What are the Beneficial Ownership Information (BOI) Filing Deadlines?

The requirement to file Beneficial Ownership Information (BOI) reports typically applies to a broad range of legal entities. These include corporations, limited liability companies (LLCs), and similar structures registered or operating within a jurisdiction. The specific criteria can vary depending on the country’s regulations, but generally, the entities that must file are those that:

Existing entities (in existence before 1/1/2024) will be required to file by January 1, 2025
Any new entities created or registered on or after 1/1/2024 will have 90 days to file after their registration/establishment date
If there is any change to the information reported (including a renewal or expiration of the identification document), then you have 30 days to file the updated information to FinCEN
If there are any corrections that need to be made to the report, they must be made within 30 days from when the error was discovered or from when you had reason to know of the error

What Happens if I Don't File a BOI Disclosure Report?

Failure to comply can result in a penalty of $500 per day, up to $10,000 total, and up to 2 years of jail time.

How Can CMP Help?

CMP will be actively engaged, helping clients and other business owners with this new filing requirement. Please reach out to your CPA to coordinate our efforts in assisting you. If you have any questions regarding the CTA/BOI, please feel free to reach out to any of our staff and they can assist you as well.

The deadline to submit information to CMP for existing entity filings is November 30, 2024.

How Much Does Beneficial Ownership Information Filing Cost?

CMP’s base fee for BOI reporting is $300.

Keep in mind that this service is completely separate from any tax return filing, and CMP will only be providing this service if requested. If CMP provides this service then it will be under a separate engagement letter specifically for BOI reporting purposes, and will be limited to initial filings. Any subsequent event triggering an updated filing, will require a new engagement.

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