The Corporate Transparency Act 

Small Businesses Compliance FAQs

Starting January 1, 2024 the Federal Government added a new reporting requirement for Small Businesses, requiring the filing of a Beneficial Ownership Information (BOI) Report with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). Congress imposed this requirement in the Corporate Transparency Act (CTA), and FinCEN issued the regulation providing the details on who must file a report, when it has to be filed, and what information has to be reported.  Small Businesses must comply with the new reporting requirement; non-compliance can result in severe penalties. This article addresses some of the main questions small business owners have been asking about BOI reporting.

Who has to file a BOI report?

Every corporationLLC, or other entity created in the United States is required to file a BOI report unless it qualifies for an exemption. Those entities are called “domestic reporting companies.”  Certain entities created in foreign countries and registered to do business in the United States are also required to file a BOI report and are called “foreign reporting companies.”

What is the purpose of the Corporate Transparency Act?

The CTA is law which helps the government fight money laundering, terrorism, fraud and other illegal acts.  The CTA was enacted to prevent bad actors from concealing their ownership in business entities they use to facilitate money laundering, financing of terrorism, tax fraud, and other illegal acts.  


When does the initial BOI report have to be filed?

A domestic reporting company created before January 1, 2024 must file its initial BOI report by January 1, 2025.

Who is exempt from filing a BOI report?

There are numerous exemptions to filing a BOI report, including entities that are already subject to substantial federal or state regulation, such as publicly traded companies and other entities that file reports with the SEC, banks, credit unions, money services businesses, securities brokers and dealers, tax-exempt entities, insurance companies, state-licensed insurance producers, pooled investment vehicles, public utilities, and accounting firms.  In addition, large operating companies are exempt, including entities that (1) employs more than 20 full-time employees in the United States, (2) has an operating presence at a physical office within the United States, and (3) has filed a federal income tax or information return in the United States for the previous year demonstrating more than $5 million in gross receipts or sales.

What kind of information has to be reported by domestic reporting companies?

A domestic reporting company created on or after January 1, 2024 has to provide information about the company, its beneficial owners, and its company applicants.

What information about the company has to be reported?

The report must set forth the reporting company’s (1) full legal name, (2) any trade or “doing business as” names, (3) complete current street address of the principal place of business, (4) jurisdiction of formation, and (5) taxpayer identification number.

What information has to be reported for each of the beneficial owners and applicants?

The report must set forth each beneficial owner’s their (1) full legal name, (2) date of birth, (3) complete current residential street address (except in the case of a company applicant who forms or registers an entity in the course of the company applicant’s business, who has to provide the street address of the business), (4) unique identifying number and the issuing jurisdiction from either a current (i) U.S. passport, (ii) state or local ID document, (iii) driver’s license, or (iv) if the individual has none of those, a foreign passport, and (5) an image of the document from which the unique identifying number was obtained.

Who is a “beneficial owner”?

A beneficial owner is an individual who, directly or indirectly, either exercises substantial control over the reporting company or owns or controls at least 25 percent of its ownership interests.

Who is a “company applicant”?

A company applicant is the individual who directly files the document that creates the domestic reporting company and the individual who is primarily responsible for directing or controlling the filing if more than one individual is involved in the filing of the document. 

A domestic reporting company created on or after January 1, 2024 and before January 1, 2025 must file a report within 90 calendar days of the date on which it receives actual or public notice that its creation has become effective.

A domestic reporting company created on or after January 1, 2025 must file a report within 30 calendar days of the date on which it receives actual or public notice that its creation has become effective.


What if there are changes to the reported information?

If there is any change in the information reported about the reporting company or its beneficial owners, the reporting company must file an updated report within 30 calendar days after the date on which the change occurs.  This includes a change in who the beneficial owners are and if the reporting company becomes eligible for an exemption. There is no requirement for a reporting company to update information about the company applicant.

What if a filed BOI report contains an error?

If a report was inaccurate when filed, a corrected report must be filed within 30 calendar days after the reporting company becomes aware of or has reason to know of the inaccuracy.

Are there penalties for failure to comply with the filing requirements?

Yes.  Failure to comply with the initial and ongoing reporting requirements can lead to civil and criminal penalties, including a maximum civil penalty of $500 per day (up to $10,000) and imprisonment for up to ten years.

 How are BOI reports filed?

The initial BOI report and all updates and corrections are filed electronically with FinCEN through a system that will be available via FinCEN’s website. 

To learn more about how Private Corporate Counsel can help you file the reports, call us at 407-647-7887 or email us at

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