Corporate Transparency Act

Do you know about BOI? That's Beneficial Ownership Information. If you own an LLC and haven't heard of the Corporate Transparency Act, take a look.

Transcript

1. Corporate Transparency Act Heather Noggle April 23, 2024
2. What Is This Thing? The Corporate Transparency Act! • Enacted 1/1/2021 – part of the National Defense Authorization Act • Reporting requirements began 1/1/2024. • Did your business exist before 1/1/2024? You have more time. • Who has to care? • Probably you. Let’s explore.
3. Why Is It Here? Theoretically… • Combatting money laundering • Unmasking terrorist funding • Fighting corruption • Diminishing tax fraud Owned and administered by FinCEN.
4. About that Lawsuit… • March 1, 2024 – in Alabama. “This thing’s unconstitutional” • That means that the plaintiffs don’t have to file BOI. • But, well, we do. So that’s what we need to know. • The government’s appealing. It really wants those plaintiffs’ filing info. https://www.crowell.com/en/insights/client- alerts/federal-district-court-rules-corporate- transparency-act-unconstitutional
5. Oh, BOI! • BOI = Beneficial Ownership Information • That’s what you have to report to FinCEN about your company • C Corporation • S Corporation • LLC • Not a small amount of it either. • Long list of esoteric exemptions
6. BOI Overview https://www.fincen.gov/boi https://boiefiling.fincen.gov/fileboir Overview • Organization information • Information about each owner • 50ish total data elements (and that’s if you have just one owner)
7. Who? • Domestic owners (S Corp, C Corp, LLC, yes yes yes) • Other domestic private company owners • Foreign company owners (formed under foreign law, business here) • Assume you have to file, and then review the exemptions. They’re things like banks, credit unions, public utilities, accounting firms, etc. Sole proprietors don’t have to file.
8. Who Part 2 What if my company’s dormant? (Well, then, you don’t have to file…but know THEIR definition of dormant) • In existence before 1/1/2020. • Not doing any business • Not owned by foreign persons • No changes in ownership in the last 12 months • No money sent nor received > $1,000 in the last 12 months • No client-initiated activity within 180 days • Not holding assets
9. What? (What Did You Say) Why, the BOI, of course. Beneficial Ownership Information. Main sections: Filing information Information about the Reporting Company Company Applicant(s) Beneficial Owner(s)
10. Where? Welcome to FinCEN This portion of the program is sponsored by the BOI website. https://www.fincen.gov/boi (Live quick demo)
11. Choices! The PDF BOIR is interactive. XML guide is 43 pages. Technical document. API guide is 22 pages. How to send the XML file.
12. When It’s complicated – the scenarios. For qualifying businesses: • In business before 1/1/2024 – file sometime in 2024. • In business since 1/1/2024 – file within 90 days of inception. • In business 1/1/2025 or later – file within 30 days of inception You do not need to file yearly. You DO need to update your filing • If ownership changes (30 days) • Iffy – if address/other company info changes. (30 days) • If you goofed details on your filing – within 30 days of finding the error.
13. Why • To comply with the law! • To avoid massive, crazy penalties • Violations – civil penalty of up to $500 a DAY each day the violation continues • CRIMINAL penalties possible – up to $10,000 • 2 years in prison possible
14. Unintended Consequences • Burdens on service providers = more cost for you • Lawyers • Accountants • Burdens Part 2 = service providers might stop services • Corporate Transparency Act Filing Scams! • Government has your data. AGAIN! SHRM: "The CTA creates a federal disclosure requirement mandating that lawyers, trustees and accountants declare their association with the entities they create and understand their true owners. The CTA stipulates that individuals who create new entities be reported to the government as 'company applicants.' This means corporate service providers will be associated in a federal database with the entities they create and potentially with any future misdeeds of those entities."
15. Call(s) To Action • File, as appropriate • Tell your friends • Follow the law for changes
16. Questions? Oh, and Qualifications • Silly AI image practitioner • Strong writer • Regular speaker • 25+ year tech career, mostly software (lately cybersecurity) • Software requirements whisperer • Tech business advisor
17. File, file, file, file, file https://www.linkedin.com/in/heathernoggle/