Client Alert – The Corporate Transparency Act and Beneficial Ownership Information Reports

The Corporate Transparency Act now requires certain entities to file a Beneficial Ownership Information Report (“BOI Report”) with the US Treasury’s Department of Financial Crimes Enforcement Network (“FinCEN”). This document is intended to give you an overview of the new reporting requirement. Please contact your HH&K attorney with any questions or for more information.

1. WHO HAS TO FILE A BOI REPORT?

•  Corporations, limited liability companies, and other legal entities that are created by the filing of a document with a Secretary of State, with some exemptions for large operating companies, banks, financial institutions, governmental entities, and tax-exempt entities.

2. WHAT INFORMATION NEEDS TO BE REPORTED?

• For the entity:
  • Full legal name of entity and all assumed/ trade names.
  • Address of principal place of business.
  •  Jurisdiction of formation.
  • EIN.

• For Beneficial Owners and Company Applicants:

• • Full legal name and date of birth.
  • Residence street address.
  • Official identifying number (U.S. passport, driver’s license, or state ID card) and image of identifying document from which number was obtained, with the individual’s photo.
•  Beneficial Owners and Company Applicants may apply for and disclose a FinCEN Identifier rather than disclosing the information above on each filing in which they are listed.

3. WHO IS A BENEFICIAL OWNER?

• Any individual who owns or controls at least 25% of the ownership interests of the entity; or
• Any individual who exercises substantial control over the entity (Senior officers, important decision-makers, those with authority to appoint or remove officers or a majority of the directors).

4. WHO IS A COMPANY APPLICANT?

•  The person who files or is primarily responsible for the filing of the document that creates or registers the company.

5. WHAT IS THE DEADLINE TO FILE MY BOI REPORT?

6. WHAT ARE THE PENALTIES FOR FAILURE TO FILE?

• Senior Officers of an entity which willfully fails to file a BOI Report may face civil or criminal penalties:
  • civil penalties up to $500 per day for each day that the violation continues.
  • criminal penalties, including imprisonment for up to two (2) years and/or a fine of up to $10,000.

7. HOW DO I FILE MY BOI REPORT?

• You can do it yourself. If you want to handle your own BOI filing, you may do so at: https://boiefiling.fincen.gov/.
  There is no fee for filing the report.
• Hinman, Howard & Kattell, LLP can assist you. If you would like us to assist you with filing your BOI report, you can contact us and engage us for that purpose.

8. WHEN DO I NEED TO UPDATE MY BOI REPORT?

• BOI Report must be updated within thirty (30) days of any one or more of the following events:
  •  Any change in the information submitted about the entity itself, including a change from non-exempt to CTA-exempt.
  • A change to the identity of a Beneficial Owners.
  • Changes to the image of the identifying documents submitted to FinCEN if the change pertains to the Beneficial Owner’s name, date of birth, residence address, or unique identifying number.
• No report is required upon the dissolution or termination of a Reporting Company.

Contact Your HH&K Attorney for Legal Guidance

This information is not legal advice and may not be suitable for all client situations.  This Client Alert provides general information and does not outline all of the important considerations related thereto.

This Client Alert is not a substitute for legal guidance.   As always, if we can be of assistance with these programs or any other matters, please do not hesitate to contact your HH&K attorney.

Click here for a printable version of this Client Alert.

Client Alert Date: October 21, 2024

Article written by:
Christina J. Graziadei
Associate Attorney
E: cgraziadei@hhk.com

Christina J. Graziadei is an Associate in Hinman, Howard, & Kattell, LLP’s Business and Corporate Law and Not for Profit Corporation and Foundation Practice Groups. Her practice includes counseling both for-profit and not-for-profit entities in all aspects of operation, including formation, organization, transactions, contract review, business succession planning, and dissolution.

Christina received her B.A. in 2016 from Hartwick College in Oneonta, New York (Political Science). She received both her J.D. from Syracuse University College of Law and her Master’s degree (Forensic Science) from Syracuse University College of Arts and Science’s Forensic and National Security Sciences Institute in 2019. During her time at Syracuse Law, Christina served as an Academic Success Fellow in the areas of Torts and Constitutional Law. She was also an Associate Notes Editor for the Syracuse Law Review.

Copyright © 2024 by Hinman, Howard & Kattell LLP. This Client Alert is provided as a general information service to clients and friends of Hinman, Howard & Kattell, LLP. It should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. These materials may be considered Attorney Advertising in some states.