Corporate Transparency Act: What You Need to Know about BOI Filing (12-21-2024) / **UPDATE: 12-30-2024**
- Eric Horne, CFP®
- Dec 21, 2024
- 4 min read
Updated: Dec 30, 2024
Please review this important Update as of December 30, 2024. The BOI Filing requirements are once again Voluntary as the Arm Wrestling match continues. For the time being, I'd suggest small businesses continue to check the FinCen website weekly for updates to ensure they remain in compliance pending any additional court decisions.
December 23, 2024
Please review this important Update as of December 23, 2024. The BOI Filing requirements are back in place, with some minor adjustments to deadlines. Review the update below which was pulled directly from FINCEN.
SOURCE: https://www.fincen.gov/boi
"In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline as follows:
Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
Reporting companies created or registered in the United States on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN.
Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
Reporting companies that are created or registered in the United States on or after January 1, 2025 have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.
As indicated in the alert titled “Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)”, Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)—namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024)—are not currently required to report their beneficial ownership information to FinCEN at this time."
December 21, 2024
Greetings,
You might not have heard of the Corporate Transparency Act (CTA). It is a federal law aimed at bringing more transparency to business ownership. It’s part of an effort to fight financial crimes like money laundering and tax evasion. That said, this law doesn’t apply to everyone—in fact, many of you might not have to worry about it at all, though you surely know someone who does. Let’s break it down so you can figure out if it’s something you need to act on.
Does This Apply to You?
The CTA mostly targets smaller and mid-sized businesses, such as:
LLCs
Corporations
Limited partnerships
Similar entities formed or registered in the U.S.
However, there are some big exemptions:
Publicly traded companies
Larger businesses with more than 20 employees and at least $5 million in revenue
Banks and other heavily regulated institutions
Here’s what you’ll need to know:
What’s the Point of the CTA?
The main idea behind the CTA is to figure out who really owns or controls companies—the “beneficial owners.” This makes it harder for people to use anonymous shell companies to hide illegal activities. If your business is subject to this law, you’ll need to send this info to the Financial Crimes Enforcement Network (FinCEN).
What Info Do You Need to File?
If the CTA applies to your business, you’ll be required to report details about each beneficial owner, including:
Full name
Date of birth
Residential address
A unique ID, like a driver’s license or passport number
The information must be accurate and up to date to avoid penalties.
What’s Happening Now?
Currently, the CTA’s reporting requirements are on hold because of a court-ordered pause. FinCEN isn’t enforcing the rules at the moment, but this could change quickly if the legal situation shifts. If enforcement resumes, businesses will need to comply promptly to avoid fines. They are targeting a decision by December 27th at the latest. If the law resumes, that will give millions of companies only a few days to comply with the deadline (January 1st, 2025) unless an extension is granted by amendments to the law. Currently only an estimated 8 million of the over 32 million entities subject to this law have filed.
Should You File Even Though the Law is Currently on Pause?
Even though enforcement is paused, filing early could be a smart move for some businesses. Here’s why:
Be Ready: If enforcement resumes, you’ll already have your bases covered.
Avoid Penalties: Non-compliance can lead to fines of over $500 per day.
Peace of Mind: Being proactive shows you’re serious about staying compliant.
Key Points to Remember:
The CTA applies to many small and mid-sized businesses but has clear exemptions.
Reporting requirements are paused for now, but the situation is fluid.
If you’re conservative in your approach, filing early might save stress later.
Where to Learn More
For more information, check out these resources:
Thank you,
Eric Horne
Arc Element Wealth Design
Disclosure Statement
This newsletter is for informational purposes only and should not be considered investment advice. Arc Element Wealth Design (AEWD), a Nebraska-registered investment adviser, does not guarantee the accuracy or completeness of any information provided. Investment decisions should be based on an individual’s personal objectives and financial situation, and all investments involve risk. Past performance is not indicative of future results. For further information about AEWD’s advisory services, please review our Form ADV, available upon request.
