Important Reminder: Under the CTA, a BOIR is Required to be Filed by January 1, 2025

The Corporate Transparency Act (CTA) was enacted by the federal government in 2021 to strengthen federal money laundering and tax fraud statutes by improving transparency in business ownership. The CTA is enforced by the Financial Crimes Enforcement Network (FinCEN). FinCEN requires reporting companies to file with the Department of Treasury a Beneficial Ownership Information Report (BOIR). This filing needs to be completed by January 1, 2025.

Any entity created in 2024 has 90 calendar days from the date of formation to file a BOIR. Any entity created before January 1, 2024, has until January 1, 2025 to file a BOIR.

There are 23 exemptions to the requirement to file a BOIR, which includes banks, credit unions, investment companies, investment advisors, state licensed insurance producers, accounting firms and inactive entities.

The remaining companies must report the following information about the company:

• Legal name of the company.
• Any trade name.
• Current street address of the principal office of the company.
• Where the company was formed.
• The EIN number assigned to the company.

The remaining companies also must file information on the beneficial owners of the company. A beneficial owner is an individual who either directly or indirectly exercises substantial control over the company or owns or controls 25% or more of the company. An individual exercises substantial control if they are a senior officer of the company (president, chief financial officer, etc.), or they have the authority to appoint or remove officers or most of the directors of the company or are an important decision maker for the company. The information to be reported for each beneficial owner includes the individual’s name, date of birth, address, and an identification document such as a passport or driver’s license.

Time is running out. You must file a BOIR report prior to the end of the year. If you choose to file the report on your own, go to FinCEN’s BOIR Filing website and select “File BOIR.” If you would like CMDA to file a BOIR on your behalf, please provide us with the company and owner information. Be sure to include a copy, front and back, of each beneficial owner’s driver’s license. If a beneficial owner does not have a driver’s license, then a passport will suffice.

If you have questions about the CTA’s requirements, need additional information on filing a BOIR, or just want to ensure your business is on the right track, please feel free to reach out to Christopher G. Schultz at cschultz@cmda-law.com or (734) 261-2400.

Christopher G. Schultz has 40 years of broad and extensive legal experience in matters involving small and large businesses and related litigation. Since joining CMDA in 1993, he has significantly grown the Firm’s business law practice group by bringing in many new clients, including manufacturers, financial service institutions, and small and large businesses in the retail and service sectors.

He focuses his practice on entity selection, start-up and funding issues, shareholder and owner relationships, employment matters, mergers and acquisitions, real estate matters, and business succession planning. Additionally, he assists clients with estate planning matters, including wills, trusts, charitable giving, estate administration, irrevocable trusts, gifting, and special needs trusts.