Callahan & Blaine Bulletin 24-118
Mandatory BOI Reporting Requirements
United States Treasury
(for United States Based and Registered Foreign Companies)
We would like to inform you about the Corporate Transparency Act (CTA), enacted by the United States Congress in 2021. Registrations under the CTA began January 1, 2024. The stated purpose of the CTA is to create a database of beneficial ownership information (BOI) of companies as part of the “U.S. government’s efforts to make it harder for bad actors to hide or benefit from ill-gotten gains through shell companies or other opaque ownership structures.”1 The administration of the CTA falls under the jurisdiction of the Financial Crimes and Enforcement Network (FinCEN) of the United States Treasury Department. BOI provided under the CTA will be stored in a secure, non-public database managed by FinCEN. FinCEN will permit Federal, State, local governments, as well as, authorized foreign officials, authorized financial institutions and other authorized parties access to BOI. Please contact the Callahan & Blaine, Corporate Department for assistance with CTA registration and BOI reporting.
Who Must Report:
Reporting Companies include (1) domestic corporations, LLCs, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States and (2) any corporation, LLC, or other entity formed under the law of a foreign country that have registered to do business in the United States by filing of a document with a secretary of state or any similar office, even if the foreign entity was not required to file in its home country. There are 23 entity types that are exempt from reporting as they are typically already subject to federal or state regulation such as banks, credit unions, and insurance companies. Determining your company’s status as a Reporting Company can be intricate, Callahan & Blaine is here to assist you.
When Must BOI Reports be Filed:
WHEN WAS THE COMPANY ORGANIZED | WHEN IS THE INITIAL BOI REPORT DUE? |
| Reporting Company created or registered to do business before January 1, 2024 | File on or before January 1, 2025 |
| Reporting Company created or registered on or after January 1, 2024 and before January 1, 2025 | File within 90 calendar days after receiving actual or public notice of the company’s creation or registration (typically from Secretary of State) |
| Reporting Company created or registered on or after January 1, 2025 | File within 30 calendar days after receiving actual or public notice of the company’s creation or registration |
Beneficial Owner Disclosures:
A Beneficial Owner is an individual who either directly or indirectly (1) exercises substantial control over the Reporting Company OR (2) owns or controls at least 25% of the Reporting Company’s ownership interest (e.g., stock of a corporation, membership interest of an LLC, voting rights, profit interest, option holder, etc.). Please note that Beneficial Ownership is not limited to owning an interest in the company. A Beneficial Owner may include: certain directors, the president, CFO, GC, CEO or any other officers or other individuals regardless of title who are “important decision-makers” or hold “any other form of substantial control” over the Reporting Company. Identifying all Beneficial Owners can be difficult especially in cases of layered ownership structures. Callahan & Blaine can assist you with identifying your company’s beneficial owners for reporting purposes and provide you with guidance regarding authorized exemptions you or others may qualify for.
Company Applicant Disclosures:
For any Domestic Reporting Company created or registered on or after January 1, 2024, or any Foreign Reporting Company first registered to do business in the United States on or after January 1, 2024, they must also disclose the Company Applicant(s). A Company Applicant is the individual who directly filed the document to create or register the company and if more than one person was involved in the filing, also the individual who is primarily responsible for directing or controlling the filing.
Reporting Information:
BOI reports (initial or updated) require Reporting Company details including, legal name, all fictitious business names, principal place of business, and other required corporate information (no financial information). For each individual who is a Beneficial Owner or a Company Applicant, information to be reported includes the individual’s name, date of birth, and address together with identifying information. Changes to the information regarding the Reporting Company or Beneficial Owner(s) should be updated within thirty (30) days of the change.
Failure to File Timely or Accurate BOI Reports:
The CTA stipulates potential severe penalties for persons who willfully violate the BOI reporting requirements. Penalties include civil penalties up to $500 per day and criminal penalties of up to two years in prison and a fine up to $10,000.
Callahan & Blaine stands ready to assist you and your company with its litigation and corporate needs, including the preparation and filing of your BOI reports.
Contact Callahan & Blaine’s Corporate Department to request a consultation for assistance with registration and reporting.
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EN¹– See, FinCEN FAQ #2 from the U.S. Treasury Official Website, fincen.gov
This Bulletin is for informational purposes only. Its contents are not intended to constitute legal advice, and it should not be relied upon as such. The information provided herein is general in nature and may not address all legal or factual aspects relevant to your specific situation. Receipt of the Bulletin does not create an attorney-client relationship. You are advised to consult with a licensed attorney before taking any action. This Bulletin may not reflect the most current legal developments or laws in this area. Changes in the law could make the information contained herein outdated.
