If you own a company with a presence in the US that has less than $5 million in revenue and fewer than 20 full-time US-based employees, you likely will have upcoming filing requirements under the Corporate Transparency Act (“CTA”) before the end of this calendar year.

As a reminder, the CTA is a new federal law that took effect on January 1, 2024.  It was enacted to combat money laundering, and under the CTA, all companies that are “reporting companies” must file beneficial ownership reports (“BOI reports”) with the Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”). Additional background information on the CTA and its requirements and exemptions can be found in our previous client alert on January 31, 2024.

Filing Deadlines and Updates to BOI Report

For reporting companies that are not exempt from filings under the CTA, the deadline for filing the BOI report may be approaching. Reporting companies created or registered to do business in the US before January 1, 2024 must file their initial BOI report before January 1, 2025. Reporting companies created or registered to do business in the US between January 1, 2024 and December 31, 2024 must file their initial BOI report within 90 calendar days after receiving notice of their creation or registration. Reporting companies created or registered to do business in the US on or after January 1, 2025 must file their initial BOI report within 30 calendar days after receiving notice of their creation or registration.  

If there is any change to the information submitted in a reporting company’s BOI report about the company or its beneficial owners, the company must file an updated report within 30 calendar days after the change.  

How to File

The BOI report may be submitted online via FinCEN’s website. There is no filing fee for the BOI report.  While you may complete the BOI report filing yourself through FinCEN’s website, particularly in light of the newness of the applicable regulations, corporate filing agents can assist with these filings and clients can work directly with a corporate filing agent to fulfill this requirement. For instance, Cogency Global provides a full-featured filing service called CTA Central which can be accessed either through their website, or by emailing them at boston.orders@cogencyglobal.com.

Importantly, FinCEN may impose substantial penalties if filings are not made within the required period, including fines and possible imprisonment.

Dissolved Entities

Reporting companies that entirely completed the process of formally and irrevocably dissolving before January 1, 2024 are not required to file a BOI report. However, reporting companies that were fully dissolved in 2024, even if they were fully dissolved before their initial BOI report was due, must still file an initial BOI report.  

Holding Companies and Subsidiaries

Holding companies generally are not exempt from the CTA’s BOI report requirements, unless they meet one of the specified exemptions (see Question C.2 of FinCEN’s BOI FAQs for additional details on exemptions).  

Generally, subsidiary entities are also not exempt from the CTA’s BOI report requirements, unless they meet one of the specified exemptions. However, if a reporting company meets one of the specified exemptions, then its subsidiary entities whose ownership interests are controlled or wholly owned, directly or indirectly, by the exempt reporting company are also exempt from the BOI reporting requirements, under Exemption No. 22 (subsidiary of certain exempt entities).   

Questions

If you have any questions, please contact Casner & Edwards attorneys Peter Dunn, Michael Zullas, Steven Ayr, or Drew Douglas-Steele.