Navigating the Corporate Transparency Act: A Step-by-Step Guide to Filing Beneficial Ownership Information

The Corporate Transparency Act (CTA) has imposed new reporting obligations on many businesses. Our  step-by-step guide will help you understand and fulfill your reporting requirements.

Step 1: Determine if You’re a Reporting Company

The first step is to assess whether your company falls under the CTA's jurisdiction. This involves considering factors such as your company's structure, size, and activities.

Step 2: Identify Your Beneficial Owners

Once you've determined that your company is subject to the CTA, you need to identify all of your beneficial owners. This may require gathering information from shareholders, partners, and other stakeholders.

Step 3: Gather Required Information

For each beneficial owner, you must collect the following information:

• Full name
• Date of birth
• Current residential address
• Unique identifying number
• A photocopy of identification

Step 4: Create Your Report

Using the collected information, you must create a BOI report that accurately reflects your company's ownership structure.

Step 5: File Your Report

The report must be filed electronically through FinCEN's Beneficial Ownership Secure System (BOSS). Be sure to follow the specific instructions and deadlines provided by FinCEN.

Step 6: Maintain Records

After filing your report, it's important to maintain accurate records of your beneficial ownership information to ensure compliance with the CTA and address any future inquiries.

Complying with the Corporate Transparency Act can be complex, but by following this step-by-step guide, you can ensure that your company meets its reporting obligations. For more information or to speak with us about your legal issue, please contact our business attorneys in Ann Arbor at 734-665-4441.Schedule an initial consultation. 

Understanding the Corporate Transparency Act: New Reporting Requirements for Businesses

The Corporate Transparency Act (CTA) has introduced significant changes to the way businesses operate in the United States. Effective January 1, 2024, certain companies are now required to file Beneficial Ownership Information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN).

Who is Affected?

The CTA applies to a wide range of businesses, including:

• Domestic corporations
• Limited liability companies
• Foreign entities registered to do business in the US

However, some exemptions exist, such as for publicly traded companies, certain nonprofits, and large operating companies.

What Information is Required?

Reporting companies must provide detailed information about their beneficial owners, which are individuals who:

• Exercise substantial control over the company
• Own or control 25% or more of the ownership interest

For each beneficial owner, companies must report:

• Full name
• Date of birth
• Current residential address
• Unique identifying number
• A photocopy of identification

Reporting Deadlines and How to File

The reporting deadlines vary depending on when the company was formed. Existing companies must file by January 1,2025, while new companies have shorter deadlines. Reports must be filed electronically through FinCEN's Beneficial Ownership Secure System (BOSS).

The Importance of Compliance

Failure to comply with the CTA can result in significant penalties, including civil fines and criminal penalties. It is essential for businesses to review their company structure and determine if they’re subject to these reporting requirements. Consulting with legal counsel can help ensure full compliance.

The Corporate Transparency Act has introduced new transparency measures for businesses in the United States. Understanding the requirements and complying with them is crucial to avoid penalties and maintain a positive reputation. For more information or to speak with us about your legal issue, please contact our business attorneys in Ann Arbor at 734-665-4441.Schedule an initial consultation.