Corporate Transparency Act: What You Need to Know

Attention Business Owners!

The Corporate Transparency Act (CTA) deadline to file an initial report is January 1, 2025.

Through conversations with clients, colleagues, and professionals, we have learned that many individuals are unaware of this act and its requirements. As we approach year-end, it is imperative that those required to report ensure that all necessary filings are completed by the deadline to avoid penalties. Below is a guide to what the CTA entails, key dates, and resources to help you comply.

What is the Corporate Transparency Act (CTA)?

The CTA was enacted to prevent illegal activities such as money laundering and tax fraud by requiring businesses to file a Beneficial Ownership Information (BOI) report with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). Think of this like enhanced airport security — everyone is subject to extra scrutiny due to a few bad actors. The goal of the CTA is to increase transparency and accountability for businesses and beneficial owners alike.

Key Dates for all entities subject to the CTA

• January 1, 2024 - Reporting requirements under the CTA officially began.
• All entity formed or registered before January 1, 2024 must submit your BOI report by January 1, 2025. After filing your initial report, any changes to ownership or other material updates must be reported within 30 days of the change.
• Any entity formed or registered after January 1, 2024 and before January 1, 2025, must file its initial BOI report within 90 calendar days of its formation or registration becoming effective.
• Any entity formed or registered after January 1, 2025, must file its initial BOI report within 30 days of its formation or registration becoming effective.

How and Why to File Timely

The most straight forward way to complete your initial report is to file online via the FinCEN website, which is linked in the Useful Links & Resources section below.

It is important to file your BOI report by the required deadlines to avoid both civil and criminal penalties, which can include substantial fines or jail time. We recommend speaking with your accountant, attorney, or other financial professional for further guidance on the specifics of your filing requirements.

Closing Thoughts

As this reporting is a new requirement, many individuals do not fully understand the process. Since we are rapidly approaching the filing deadline for initial reports, we thought we would share with you the questions we have heard most often:

• Are there any exemptions from having to file and who qualifies for these? YES, there are twenty-three exemptions listed in the Act.
• Does this apply to only my business entity or to other entities as well, such as Trusts? Yes, some.
• Where can I find information on who must file and how and where filing can be completed? The FinCEN website is the most reliable resource for answers to these and other questions. We have included a link below.

We are not experts in this field, but we are experts in providing support to our clients and partners, therefore, we suggest reviewing resources such as the FinCEN website and its multiple publications on this new requirement and that you consider consulting your legal professional. If you would like to be referred to a legal professional for guidance, we would be happy to make such an introduction.

Useful Links & Resources

• GRWP Webinar: Marty Hauptman, Esq., Partner at Mandelbaum Barrett PC, discussed the CTA in detail during our September webinar. His presentation starts at minute twenty-three in the video.
  YouTube Link
• FinCEN Website: For more information or to file your BOI report, visit the official FinCEN website.
  FinCEN BOI Filing
• FinCEN FAQ Page: Please use the following link to access a FAQ page to have more information: PDF Link

Green Ridge Wealth Planning, LLC is a registered investment adviser. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment / tax advice. The investment / tax strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment / tax strategy for his or her own particular situation before making any investment decision. You are responsible for consulting your own investment and/or tax advisor as to the consequences associated with any investment.

The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of AUTHOR, may differ from the views or opinions expressed by other areas of Green Ridge Wealth Planning, LLC, and are only for general informational purposes as of the date indicated.