CLIENT ALERT – Update on Corporate Transparency Act Reporting Requirements
Corporate Transparency Act
Almost every business entity registered with a state (whether as an LLC, corporation, or otherwise) is required to complete and file a Beneficial Ownership Information Reporting (BOIR) form with the federal government.
Reporting Process
A copy of the current BOIR form is attached for reference. The form must be submitted online at www.fincen.gov/boi. The online portal is now open and accepting filings.
Deadlines
For entities created before January 1, 2024, the BOIR form must be filed by January 1, 2025.
For entities created on or after January 1, 2024 but before January 1, 2025, the BOIR form must be filed within 90 calendar days of entity formation.
Limited Exceptions
There are very limited exceptions to the reporting requirement. The “large operating company” exception may be available to any entity that: (i) employs more than 20 full time employees in the United States; (ii) has an operating presence at a physical office within the United States; and (iii) filed a Federal income tax or information return in the United States for the previous year demonstrating more than $5,000,000 in gross receipts or sales (excluding gross receipts or sales from sources outside the United States). The “inactive entity” exception may be available to any entity that: (i) was in existence on or before January 1, 2020; (ii) is not engaged in active business; (iii) is not owned by a foreign person, whether directly or indirectly, wholly or partially; (iv) has not experienced any change in ownership in the preceding twelve month period; (v) has not sent or received any funds in an amount greater than $1,000; and (vi) does not otherwise hold any assets. There are other exceptions available, but most of them relate to entities that have already reported ownership to the government pursuant to other rules and regulations (such as securities or banking regulations).
Updates
The reporting process and requirements remain subject to change as the government releases
additional guidance.
For assistance, please contact your CPA or one of our business law attorneys listed below.
Andrew R. Sandler, Esq. – asandler@levingann.com – 410.321.4660
Mayer E. Guttman, Esq. – mguttman@levingann.com – 410.321.4648
Sean K. Elavia, Esq. – selavia@levingann.com – 410.321.4651
Jacob M. Rappaport, Esq. – jrappaport@levingann.com – 410.321.4641
Note: This Summary is provided for informational purposes only, and no one should rely upon the information contained herein as constituting legal advice. Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between any attorney and any other person, group or entity. The information may be modified or rendered incorrect by future legislative or judicial developments and may not be applicable to any individual’s facts and circumstances. It is strongly suggested that you seek individual counsel to review your specific needs and goals.