With the Corporate Transparency Act‘s requirement for filing on new and existing entities effective January 1, 2024, companies formed on or after January 1, 2024, will be required to file their BOI reports within 90 days of formation, while pre-2024 filers will have until January 1, 2025.
The Corporate Transparency Act (CTA) mandates that most U.S. businesses, including Limited Liability Companies (LLCs) registered in Alabama,
Starting January 1, 2025, all entities formed on or after January 1, 2025, will be required to fulfil the BOIR filing obligations within 30 days of filing the formation documents.
In search of help in filing BOI Reports, Contact BOIFinCEN Reporting for hassle-free service.
How to Prepare for the BOIR Filing Deadline
In preparation for the deadline of January 1, 2025, proceed as follows:
1. Confirm Exemptions
First, see if your business is exempt under the CTA. Overall, the CTA exempts 23 types of entities. Examples of exempt entities include, but are not limited to, publicly traded companies, covered financial institutions and nonprofits. If your entity does not fall into one of the exempt categories, it is considered a “reporting company” and will need to file with BOIR.
2. Review Entity Records
Keep entity records current for ownership percentages and management. In this regard, the process of determining the beneficial owners and generating a BOI report will not be overly burdensome with proper bookkeeping.
3. Identify Beneficial Owners
There are two key elements that identify who the beneficial owners are, including:
Anyone who directly or indirectly owns 25% or more of the company in this regard.
Those who generally exercise substantial control over the company.
4. Consider Getting FinCEN Identifiers
While not mandatory, FinCEN identifiers make reporting easy. Beneficial owners can be assigned a unique FinCEN identifier that can be used instead of personal information in the BOI reports. This will reduce the need to enter personal details every time a person is to be listed as a beneficial owner.
5. File Early
It will be very wise to file your BOI report well ahead of time as over 32 million entities fall under the filings of the CTA. Information from beneficial owners takes some time to arrive, and it is thus advisable to begin well in advance to avoid any issues at the last minute.
Corporate Transparency Act: Looking Beyond 2025
The BOI reporting timeline for newly formed entities formed after January 1, 2025, is even stricter; these shall file their reports within 30 days of the date of their formation. Any change in the beneficial ownership information shall be filed with FinCEN within 30 days of such change. This puts great emphasis on record maintenance.
Conclusion
For entities formed prior to 2024, the BOIR filing deadline of the Corporate Transparency Act presents a critical compliance date that will be ignored at one’s peril. Verification of exemptions, updating of records, and identification of their beneficial owners well in advance of the deadline will definitely help a business avoid facing penalties and result in smoother compliance.
Whether preparing for the upcoming deadline or planning for future requirements, proactively taking these steps now will save time and reduce stress.
If you need any assistance with the filing process or have questions about BOIR filing, please contact us and let our team of experts help.
