Many of our neighboring business owners and clients have contacted our firm lately to inquire about the Corporate Transparency Act and a new reporting requirement from the Financial Crimes Enforcement Network (FinCEN) that went into effect on January 1, 2024. Granted, most business owners these days are used to adhering to various local, state, and federal filing requirements to keep their companies in good standing, but this additional filing seems to have caught many by surprise.
If you are wondering what this means for you and your business, please keep reading.
The Basics of the New Reporting Requirement
Effective January 1, FinCEN introduced new regulations generally referred to as the “Corporate Transparency Act” that require the reporting of beneficial ownership in certain entities. The goal is to shed light on who really owns and controls certain businesses, thus making it more difficult for shady individuals to hide behind their entities to evade taxes, launder money, etc.
Various business types are now required for compliance purposes to complete the additional filing with the U.S. Department of Treasury — even if everything about your business and its officers is on the up and up. Examples of businesses impacted include:
- Single-member LLCs
- Multi-member LLCs
- Small S Corporations
- Small C Corporations
These Rules Apply To New and Existing Entities
There is an online filing process that appears to us to be somewhat like the burden of filing for an EIN with the IRS. The U.S. Department of Treasury is providing one year (until January 1, 2025) to register all entities formed prior to 2024. However, entities formed between January 1, 2024, and December 31, 2024, have only 90 days to file a Business Ownership Information (BOI) report.
Entities formed on or after January 1, 2025, will have only 30 days to file a BOI Report.
As an example, small corporations and LLCs subject to the BOI reporting requirements include those with the following characteristics:
- 20 or fewer full-time employees;
- $5 million or less in domestic gross receipts reported on their prior tax return; and
- A physical presence within the United States
Failure to comply with the Business Ownership Information (BOI) reporting requirements can result in severe penalties, including civil penalties of up to $500 for each day a violation persists, a criminal fine of up to $10,000, and possible imprisonment of up to two years.
Call Nelson Law Group Today!!
If you have questions about this or any other issue, it is always a good idea to talk to a lawyer about your situation. Give our knowledgeable staff at Nelson Law Group, PC, a call today. Our staff is always available.
Give us a call today! For more information about Brett A. Nelson, click here.
The post The Corporate Transparency Act Is Here: Here’s What You Need To Know appeared first on Family Law, Divorce, Personal Injury in Texas.
Source: Nelson Law Group