The following letter was sent via priority mail to Legacy clients who may be affected by this deadline:

The Corporate Transparency Act (CTA) was enacted as part of the National Defense Act for Fiscal Year 2021. The CTA mandates entities report their beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN).

We are sending this notification because we have identified that you may have a filing requirement under these new rules. If you are a domestic or foreign entity that filed formation or registration documents with a U.S. state or Indian tribe and do not meet any of 23 exemptions, you will need to register.

An entity can be any type of corporation, partnership, LLC or sole proprietorship including operating businesses, investment holding entities or rental activities.

Formation or registration documents include, but are not limited to:

  • Articles of Incorporation
  • Articles of Organization
  • Business Registration with Secretary of State

Although there are 23 exemptions for filing, the primary exemption that for-profit business or rental entities could qualify for is the large operating entity rules. If the entity meets all of the following it will not have to file:

  • employs more than 20 people in the U.S.
  • had more than $5 million in gross revenue or sales on your prior year tax return.
  • has a physical office in the U.S.

Filing Deadlines

  • Existing entities created or registered before Jan 1, 2024 must file by Jan 1, 2025
  • New entities created or registered in 2024 must file within 90 days of creation/registration
  • New entities created or registered on or after Jan 1, 2025 must file within 30 days of creation/registration

Each company must report the required information through the FinCEN BOIR E-Filing system. Information required includes:

  • Full legal name of the reporting company and any trade or DBA names
  • Business Address
  • State or Tribal jurisdiction of formation or registration
  • IRS Taxpayer Identification Number

Each reporting company must report the following details on its beneficial owners and, for newly created entities, its company applicant(s):

  • Name
  • Birthdate
  • Address
  • Unique identifying number and issuing jurisdiction from an acceptable identification document (and image of such document).
    • For example, a state issued driver’s license or identification card.

Reporting entities that have changes to previously reported information or discover inaccuracies in previously filed reports must file changes within 30 days. This means that all information that is reported must be kept current, including address changes of the entity or its beneficial owners, and changes in ownership.

Civil penalties are up to $591 per day that a violation continues. Criminal penalties include a $10,000 fine and/or up to two years of imprisonment.

Please note that this is a free filing through the FinCEN web site. FinCEN does not send unsolicited requests, and filings are completed online. If you receive any emails, letters or phone calls asking you to share your information to comply with the new regulations, they are most likely fraudulent. You should not click any links or scan any QR codes.

Because this new filing is so closely tied to registration documents and the legal formation of your entity, please consult your legal counsel to determine if you have a filing requirement and to assist with compliance.  We would like to provide the following online resources to help you in your compliance with the new law:

FinCEN: https://www.fincen.gov/boi

FinCEN Toolkit: https://www.fincen.gov/boi/toolkit

IL Sec of State:  https://www.ilsos.gov/departments/business_services/boireport.html

IN Sec of State: https://inbiz.in.gov/BOI/

MN Sec of State: https://www.sos.state.mn.us/business-liens/beneficial-ownership-information/

Sincerely,

Legacy Professionals LLP

 

Mailed 11/12/24; posted 11/14/24