The CTA requires certain corporations, LLCs, and similar entities to report beneficial ownership information to the Federal Government. A beneficial owner is typically defined as an individual who, directly or indirectly, exercises substantial control over the entity or owns a significant percentage of its equity interests. The specifics can vary, but generally, entities that operate in the U.S. or are registered under U.S. law are subject to the reporting requirements.

The initial reporting deadline for beneficial ownership information depends on when the entity was created.

• A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025 to file its initial beneficial ownership information (“BOI”) report.
• A reporting company created or registered on or after January 1, 2024, and before January 1, 2025, will have 90 calendar days after receiving notice of the company’s creation or registration to file its initial BOI report. This 90-calendar day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.
• Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports.

Reporting companies must file their beneficial ownership information with the Financial Crimes Enforcement Network (FinCEN): https://www.fincen.gov. The report will include identifying information about the beneficial owners, such as name, address, date of birth, an identifying number from a government-issued document, and you have to upload a copy of the government-issued document.  The actual filing is not overly complicated and is designed so that business owners can complete it.

Failure to comply with the BOI reporting requirements can result in significant penalties. As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. That person may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.