Beneficial Ownership Information Reporting Requirement

by | Jan 12, 2024 | Accounting Updates

Effective January 1, 2024 – MANDATORY REPORTING

The Corporate Transparency Act (“CTA”) enacted in 2021 requires many companies doing business in the United States to report information about the individuals who own or control them.

This reporting requirement is not part of the Internal Revenue Service Code and is not part of your tax filing requirements rather, a requirement from the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). This new reporting is to create a national database to prevent the use of shell companies for criminal activity.

Please see the Financial Crimes Enforcement Network Beneficial Ownership Information website (below) for more detailed information.

Reporting Deadlines are as follows:

  • Existing companies before January 1, 2024 — must file no later than January 1, 2025.
  • New companies formed on or after January 1, 2024 — must file within 90 days of formation.
  • New companies formed on or after January 1, 2025 — must file within 30 days of formation.

A willful failure to comply could result in civil penalties of $500 a day and/or criminal penalties up to $10,000 which could include imprisonment for up to two years. These penalties apply not only to the entity by also to senior officers who are responsible for failure to file a required BOI report.

WABC is advising all clients to contact their corporate attorney if you need assistance with this NEW reporting requirement.