Don’t you love all my posts about all the things you *must* do, or there are dire consequences? This is another one of them (please note it is not legal advice, I am not an attorney, etc.):
In 2021 Congress passed the Corporate Transparency Act, aimed at reducing money laundering. It is a small business reporting requirement with enormous potential penalties — not reporting can include a fine and imprisonment.
Let me repeat — in the worst case scenario, failing to fill out this form is a potential felony with two years of prison time, plus a potential daily penalty of over $500.
If your entity is an LLC or corporation, including a single-member-LLC, you must fill out this form by the end of 2024. If you start a new business in 2024 or 2025, you must report within 90 days of formation.
The required information includes owners and, for new businesses formed in 2024, the company owner/applicants. To clarify, even if you have set up an LLC just for a specific film or rental property or other limited purpose, this form is required, and a separate filing and form is required for every single entity, whether an LLC, an S-corporation, or a C-corporation. Limited exemptions exist, primarily for larger companies and not-for-profit entities.
Initial Reporting:
- New companies formed after 1/1/2024, within 90 days of formation.
- Existing companies formed before 1/1/2024 by 1/1/2025.
Annual reporting:
None, assuming no changes in the five elements listed below.
If there are updates:
Within 30 days of change in beneficial ownership, name or address change.
Reporting is done with a special electronic filing with the Treasury Department’s Financial Crimes Enforcement Network (not the IRS). This must be done at https://www.fincen.gov/boi
To fill out the form you need the following information about BOTH the company and the owner(s):
For the Company or Entity:
- Full legal name according to the Secretary of State.
- Any trade and “doing business as” names.
- A complete current street address of the principal place of business (A P.O. Box or the address of a 3rd party agent does not comply with this requirement).
- The state, tribal or foreign jurisdiction of formation.
- The IRS Taxpayer Identification Number (TIN/EIN).
A change of any of these 5 items at any time must also be reported within 30 days to the Financial Crimes Enforcement Network, including an address or owner change.
For the Owners/Applicants:
For each owner of at least 25% of the entity (directly or indirectly), the reporting must include for each owner:
- Legal name and date of birth,
- Address,
- Unique identifying number and the issuing jurisdiction from one of the following documents: (i) a non-expired passport issued to the individual by the United States government, (ii) or a non-expired identification document issued to the individual by a State, local government, or Indian tribe for the purpose of identifying the individual, (iii)or a non-expired driver’s license issued to the individual by a State, or (iv) a non-expired passport issued by a foreign government to the individual, if the individual does not possess any of the other documents described, and
- An image of the document from which the unique identifying number (above #4) was obtained. Additionally, the rule requires that reporting companies created after January 1, 2024, provide the four pieces of information and document image for company applicants.
At the present time there are NO extensions available and you have less than a month left to fill in the form.
There are third party solicitors that apparently do this for you. Based the debacles with firms like these with ERTCs, and because of the incredible amount of confidential information that must be provided, I strongly recommend that you do NOT use one of these groups.
This is a confusing and urgent issue, and you are kind of on your own. It is not a form I can help you with, guide you through, or give you advice about, due to liability issues. If you have an attorney or software company who originally helped you set up your LLC or corporation, they should be able to.