With the 4^th Quarter of 2024 arriving, the December 31, 2024, deadline for filing the required Beneficial Owner Report under the Corporate Transparency Act (“CTA”) for any company formed before January 1, 2024 is rapidly approaching.  If you haven’t already filed your report, your time is running out.  Despite numerous lawsuits, arguments, and legal challenges, the CTA still remains in effect. If you have not already filed your required reports, please contact a Waldron & Schneider attorney as soon as possible to get these done.

What is the CTA?

The CTA, an Act that became effective January 1, 2024, was created with the goal of increasing transparency into the ownership of most US based privately owned companies.  The intent is to decrease or prevent criminal actions often conducted through commercial business operations. FinCEN, the Financial Crimes Unite of the Department of Treasury was tasked with creating a reporting system that requires non-exempt US based businesses to report certain information about both the company and its beneficial owners.  The report is referred to as the “Beneficial Ownership Report” (“BOI Report”).  A company’s failure to timely file a report and comply with the CTA may result in both civil and criminal penalties.

What is a Reporting Company?

A Reporting Company is any entity, regardless of the type, which is registered with the Secretary of State’s Office of any state in the United States.  While there are 23 outlined exemptions potentially available, most US based companies, regardless of whether they have 1 or 100 owners are typically considered a Reporting Company.  Determining whether your company qualifies for one of the available exemptions requires additional information and analysis.  With December 31, 2024 in sight, business owners are advised to coordinate with their counsel on the options available to determine what must be done to remain in compliance.

What is a BOI Report?

The Beneficial Owner Information Report is the formal registration with FinCEN. This Report identifies information for the Reporting Company and its owners including personal identifying information of any individual who owns at least 25% of the Company’s ownership or who are in substantial control of the Company’s operations.  Determining what level of involvement equates to “substantial control” requires analysis and coordination with your corporate counsel.  This is especially true with Reporting Companies who are owned by other entities or trusts.

Do I Really Need to Do This?

Yes. Despite current pending legal battles, the CTA is in effect now and is still law.  Compliance is mandatory to avoid undesired penalties which may include not only fines or financial penalties, but the threat of jail time. As a responsible business owner, it is incumbent upon you to talk to your corporate counsel now to determine what information has to be reported or if an exemption is available.  The attorneys at Waldron & Schneider are available to facilitate the necessary review and report filing to insure you remain compliant with the current law.

This article and website are made available by Waldron & Schneider for educational purposes only and to give basic information and a general understanding of the law, not to provide specific legal advice. By using this website you understand that there is no attorney client relationship between you and Waldron & Schneider. The article and website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. For more information or questions you can contact us and one of our attorneys will be in touch soon.