As you may have heard, the federal “Corporate Transparency Act” went into effect on January 1, 2024. This act requires each “Reporting Company” to file a Beneficial Ownership Information report. Unlike other registration and filing requirements that a law firm may assist you with, Beneficial Ownership Information (“BOI”) reports for a Reporting Company should ideally be handled by someone within your enterprise—law firms may not have access to the information required to make this filing. To the extent you have questions, feel free to reach out to someone at Procopio for assistance, but ultimately your organization will be responsible for this filing.

If your company is a Reporting Company (which it very well may be, more on that below) and does not qualify for an exemption, you will need to file BOI reports for the Reporting Company on FinCEN’s B.O.S.S. website. This website provides information regarding how to obtain a FinCEN ID, which you will need for this filing, if you do not have one already, as well as information regarding how to file BOI reports, where to file, and other valuable information that may help you through this process.

A “Reporting Company” is any domestic (or foreign entity registered to do business in the United States) corporation, LLC, LLP, LP, or any other similar entity that was created by filing a document with a Secretary of State, any similar U.S. governmental office or Tribal Authority that does not benefit from a specified exemption. There are 23 types of exemptions that would relieve a company from this filing obligation, including but not limited to large operating companies, inactive entities, regulated entities, and tax-exempt entities. To find out if your company qualifies for an exemption, take a look at Section 1.2 of FinCEN’s Small Entity Compliance Guide.

Reporting companies formed before January 1, 2024 have until January 1, 2025, or less than two months from now, to file the BOI report. In addition to basic information about the company, you will be required to report personal information about its beneficial owners (“Beneficial Owners”), which includes those individuals who (1) exercise substantial control over the company, or (2) own or control at least 25% of the company’s ownership interest.

FinCEN plans to penalize Reporting Companies and Beneficial Owners who fail to provide information, so we recommend preparing now for the upcoming BOI report filing deadline and filing as soon as possible. When preparing, we recommend reading through FinCEN’s Small Entity Compliance Guide using the link above and the updated Frequently Asked Questions here.

While some companies or their owners have situations that are more complex than others, and may require time to analyze, many will find preparing and submitting the report to be relatively simple. If you have any questions or if we can provide further clarification regarding the BOI reports, please do not hesitate to reach out to Procopio. We are here to support you.