A simple oversight in your 2024 business plan could be costing you thousands of dollars a week.
New Year, new regulations. The last thing on your mind as you line up your vision and strategies for the coming year is some obscure government form, but something new just came down the pike that you need to know about.
As of January 01, 2024, now over a month ago, a dramatic new federal reporting requirement has been added to the Corporate Transparency Act (CTA) that almost certainly affects your business.
Whether you’re a corporation, LLC, or any company that was created, by the filing of a document, before January 1, 2024 and still active, you’re now required to file something called a Beneficial Ownership Information Report for everyone in your organization who meets certain requirements (which we’ll go over below).
This sudden mandate is no joke. The reporting deadlines are looming, carrying fines of up to $500 per day for non-compliance.
Here’s what you need to know…
Who has to file? Anyone and everyone with a controlling interest in your business, directly or indirectly, of 25% or more.
What information do they need? They require each qualifying individual’s full legal name, date of birth, current residential or business address, and some form of identification number from a government ID (passport, driver’s license, etc.)
Also, Information about your company; its name, address, and the nature of your business activities.
Where/ How can I file? You can go to the BOI homepage where you’ll find instructions on e-filing, account setup, etc.
What’s the point of all this? It’s a knee-jerk regulation enacted as a hedge against “illicit business activities such as shell company formation, money laundering, terrorism funding, and tax evasion.” They’re essentially going after anonymously-owned organizations by verifying the identities of beneficial owners.
Why is this the first I’m hearing about this? In the modern business/ legal climate, “following the law” isn’t enough. Just when you think you’re coloring within the lines, the whole picture changes, and you’ve got whole new requirements breathing down your neck that you may not be aware of, and guess who pays the price when you’re found not following along?
In short, it’s something we all have to bite the bullet and do. But when you’re dotting your “i”s and crossing your “t”s for Uncle Sam, it pays to have someone on your side who knows how to deal with him.
As a veteran business attorney who’s represented and consulted with hundreds of companies through every legal hurdle you can imagine, I’m no stranger to these little regulatory “surprises.” Any further questions you have, get in touch and let’s get you back to managing what’s important with your company.
Jonathan Scott