Your Responsibilities for Beneficial Ownership Reporting Under the Corporate Transparency Act

Your Responsibilities for Beneficial Ownership Reporting Under the Corporate Transparency Act

Congress enacted the Corporate Transparency Act (CTA) on Jan. 1, 2021, as part of the 2021 National Defense Authorization Act. Beginning Jan. 1, 2024, many types of companies (unless specifically exempted) must file new beneficial ownership information (BOI) forms with the Financial Crimes Enforcement Network (FinCEN). Generally, this will impact some C corporations, S corporations, limited liability companies, partnerships and any type of state-law entity that is required to file with a secretary of state or similar office.

Filers generally must report the identity of their owners upon the formation of the company and on every occasion that such information changes. Impacted companies existing prior to Jan. 1, 2024, have until Jan. 1, 2025, to file initial reports. New companies created during 2024 have 90 days to file, new companies created after 2024 have 30 days to file, and companies with ownership changes have 30 days to update their information.

Although the reach of the BOI reporting requirements is limited to “small businesses,” it will still affect a great many. There is no filing fee for BOI reporting; however, failure to comply with the BOI reporting requirements is subject to penalties ranging from $500 to $10,000, and potential imprisonment up to two years.

The purpose of BOI reporting under the CTA is to establish a database of information that will be “useful in combatting illicit finance and the abuse of shell and front companies by criminals, corrupt officials and other bad actors.” This purpose is unrelated to tax compliance obligations or with interpretations of the Internal Revenue Code. Furthermore, BOI reporting is administered directly by FinCEN, not the IRS.

We believe that the purpose and administration of BOI reporting unfortunately renders it outside the purview of services that CBIZ is authorized to provide to you. Consequently, CBIZ cannot assist you with your BOI reporting responsibilities, and CBIZ cannot advise on any nuances relevant to the determination of your BOI reporting responsibilities. We regret any inconvenience that this may cause, as we remain dedicated to your service needs and appreciate the burdens of procuring an alternative service provider.

Because CBIZ cannot provide advice or services regarding BOI reporting, we recommend consulting with your legal counsel for assistance with determining and facilitating any BOI reporting requirements. In the meantime, the following information from FinCEN may be helpful:

Also, CBIZ has published background information on the topic in these articles:

As the Jan. 1, 2024, launch date quickly approaches for BOI reporting under the CTA, unless you intend to address the reporting responsibility internally, it is very important that you contact your legal counsel as soon as possible in order to ensure timely compliance. Should you have any questions regarding this communication, please connect with one of our financial services professionals today.


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CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly traded and privately held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).

Your Responsibilities for Beneficial Ownership Reporting Under the Corporate Transparency Acthttps://www.cbiz.com/Portals/0/Images/Hero-CorporateTransparencyAct.jpg?ver=kog5o0BPPPKvfqXIjC6Plg%3d%3dhttps://www.cbiz.com/Portals/0/Images/Thumb-CorporateTransparencyAct.jpg?ver=m_nVCT_BKtlZUbywD9CGNg%3d%3dWe are writing to apprise you of new and very important information reporting requirements that may impact you beginning Jan. 1, 2024. The purpose of this communication is also to inform you about our limitations in assisting you with meeting these requirements.2023-12-08T18:00:00-05:00

We are writing to apprise you of new and very important information reporting requirements that may impact you beginning Jan. 1, 2024. The purpose of this communication is also to inform you about our limitations in assisting you with meeting these requirements.

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