Filing Deadline for Beneficial Ownership Report under the Corporate Transparency Act

QUESTION: I keep hearing rumors that my real estate firm needs to file some kind of ownership report before the end of this year. I have no idea what these agents are talking about. Can you point me in the right direction?

ANSWER: The Corporate Transparency Act (CTA) is a new regulation that will impact many real estate firms. It was signed into law in January 2021, and the CTA is designed to help combat financial crime by requiring certain corporate entities to disclose information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).

The CTA applies to most small and medium-sized businesses, including corporations, limited liability companies (LLCs), and other similar entities created or registered in the United States. Entities that meet certain exemptions, such as large operating companies with over 20 employees and $5 million in revenue, may not be required to file. If your entity is not exempt, then it will need to submit a Beneficial Ownership Information (BOI) report to FinCEN. A complete list of exemptions and other helpful information can be found in this FAQ provided by FinCEN.

For new entities, BOI reports must be filed when the entity is formed or registered. This requirement went into effect on January 1, 2024. For existing entities, BOI reports must be filed by January 1, 2025. Once an initial BOI report is filed, any change to the beneficial ownership of a non-exempt entity must be reported within 30 days of the change.

Failure to file a BOI report when you are required to do so may result in serious consequences, including substantial fines and potential criminal penalties. However, filing is easy and can be completed online by going through the step-by-step filing portal here. If you are unsure whether you need to file, then you should consult with your own legal professional to ensure compliance.

Release Date: 11/7/2024