New reporting requirements under the Corporate Transparency Act (CTA) have far-reaching impacts on business owners throughout the country. With the federal law, which took effect January 1, 2024, domestic and foreign entities doing business in the U.S. must report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) by January 1, 2025. 

UPDATE: on December 23, 2024 a US District Court granted a stay of the preliminary injunction from December 3, 2024. Companies are once again required to file their BOI reports with FinCEN.

FinCEN acknowledged that the initial deadline of January 1, 2025 might be too tight for some companies that were waiting to file, so they extended the deadline until January 13, 2025 for reporting companies that were created before January 1, 2024. Companies created on or after September 4, 2024 also have until the same January 13 deadline. Companies created after December 3, 2024 have an additional 21 days from their original filing deadline to file their initial BOI report.

In this article, we’ll discuss what Florida business owners and company applicants need to know about the CTA. Specially, we’ll dive into the following:

  • Who is affected by the CTA’s reporting requirements
  • How to report BOI to FinCEN
  • Key filing deadlines to be aware of

If you have any questions about the Act or are unsure how these reporting requirements apply to your Florida business, consult our attorneys at the Law Offices of Alex D. Sirulnik, P.A. today.

Who is Affected by the Corporate Transparency Act’s Reporting Requirements?

Passed in 2021 as part of the federal Anti-Money Laundering Act of 2020 and effective January 1, 2024, the Corporate Transparency Act (CTA) is new legislation that requires many business entities, owners and applicants to file corporate transparency reports with beneficial ownership information by January 13, 2025. Failure to comply can lead to stiff penalties, including up to two years in prison as well as fines and civil penalties. 

What is the Corporate Transparency Act?

The CTA was passed by Congress in an effort to combat illicit activity, including money laundering, terrorist financing, and other fraudulent and malicious behavior. Under the CTA, many businesses operating in the United States are now required to disclose certain information about their beneficial owners to FinCEN. 

Which Entities Must Report Beneficial Ownership Information with FinCEN? 

The majority of domestic and foreign entities registered to do business in the U.S. are impacted, though many small and medium-sized businesses are feeling the effects acutely as many are privately held businesses that have not had to report ownership details to the federal government before. 

Domestic reporting companies include any corporation, LLC or similar entity that was created by filing with the secretary of state or similar office. Foreign reporting companies include any legal entity formed under the laws of a foreign country that is registered to do business in any state within the United States. 

While the majority of domestic and foreign entities are required to report beneficial ownership information with FinCEN, there are some exemptions. For a list of 23 entity types that are exempt from reporting, refer here to the Federal Register website.    

Who is Considered a Beneficial Owner Under the CTA?

The term “beneficial owner” is central to the CTA. It includes individuals with substantial control over a reporting company or those owning or controlling at least 25% of its ownership interests. In most small businesses, this includes the primary business owner, partners and investors. These individuals must disclose ownership information to FinCEN.

How to Report Beneficial Ownership Information Under the CTA

Required business entities, including most small and medium-sized businesses in Florida, must submit their initial beneficial ownership information using FinCen’s e-filing system. There is no cost to file the report. 

Although businesses are not required to submit reporting information annually, there may be instances after the initial filing when you will need to submit information again. Examples include if a beneficial owner changes their address or legally changes their name. Operational changes may also trigger the need to resubmit BOI to FinCEN. The best way to ensure you are complying with the Corporate Transparency Act reporting requirements is to consult with an experienced attorney. 

Key Filing Deadlines Under the Corporate Transparency Act

The CTA went into effect on January 1, 2024, and any entity that was created or registered before the first of the year has until January 13, 2025, to file their initial BOI reports with FinCEN. Business entities created between January 1, 2024, and January 1, 2025, have 90 days from the date of receiving the actual or public notice of their creation to submit their BOI to Financial Crimes Enforcement Network (FinCEN). Businesses established on or after January 1, 2025, will have just 30 days to do the same.

Failure to comply with the Corporate Transparency Act’s reporting requirements can result in significant penalties, including up to two years of imprisonment and fines upwards of $500 per day for each day a violation continues.

Deadlines for Changes to Beneficial Ownership Information 

In addition to the initial filing requirement, businesses are also required to update their BOI reports if there are any changes in their beneficial ownership details. This could include changes to the beneficial owners’ names, addresses or ownership percentages, among other changes. Updated BOI reports must be filed with FinCEN within 30 days of a beneficial ownership information change.

Contact our Team at Sirulnik Law for Help

The CTA requires businesses to disclose identifying information about their beneficial owners. If you’re a business owner or involved in forming a new company, it’s imperative to understand these reporting requirements to avoid fines and penalties.

For help complying with BOI reporting requirements, consult our experienced business law attorneys at the Law Offices of Alex D. Sirulnik, P.A.