Small Business Owners, were you aware of this new federal filing requirement?
The Beneficial Ownership Information Report (BOIR) under the Corporate Transparency Act (CTA).
Most companies have to file but, if you are not sure, this helpful flowchart will help you to decide if this applies to you. If it does, you have until January 1st, 2025 to file.
23 types of entities are exempt from the beneficial ownership information reporting requirements. These entities include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies.
The following table summarizes the 23 exemptions:
| Exemption No. | Exemption Short Title |
|---|---|
| 1 | Securities reporting issuer |
| 2 | Governmental authority |
| 3 | Bank |
| 4 | Credit union |
| 5 | Depository institution holding company |
| 6 | Money services business |
| 7 | Broker or dealer in securities |
| 8 | Securities exchange or clearing agency |
| 9 | Other Exchange Act registered entity |
| 10 | Investment company or investment adviser |
| 11 | Venture capital fund adviser |
| 12 | Insurance company |
| 13 | State-licensed insurance producer |
| 14 | Commodity Exchange Act registered entity |
| 15 | Accounting firm |
| 16 | Public utility |
| 17 | Financial market utility |
| 18 | Pooled investment vehicle |
| 19 | Tax-exempt entity |
| 20 | Entity assisting a tax-exempt entity |
| 21 | Large operating company |
| 22 | Subsidiary of certain exempt entities |
| 23 | Inactive entity |
But be careful, there are a ton of scam websites and phishing emails circulating around this topic. Filing is quick, easy, and free. You don’t need a third party. The official website can be found here:
This may be handled by your accountant or other company you work with, so check with them before filing again. If not, here’s a short video showing how to file:
Why are accountants expected to be assigned to solve almost every filing requirement an insane out of control bureaucracy comes up with? As an accountant our own associations advise us not to do it as the liabilities for missing this one filing amount to over two hundred thousand dollars in prohibitive penalties, yet this filing has not one scintilla of economic data or taxes tied to it. It is a legal requirement and yet the creators of this have no obligation to advise the small business public about it at all. Would your department want the responsibility and the liability to be dropped on you? On top of it our own professional insurance companies will not even cover us if we were deemed responsible for doing so. Miss telling only 5 businesses and you incur penalties of over one million dollars. So you are publishing material dragging our profession into what would be an impossible mess to deal with when January 1st rolls around if one single issue was overlooked or incorrect. Just one business changing one piece of information on the filing and not reporting it in 30 days would invoke the same penalties……which are $10,000 plus $593 per day plus jail time. By January 1, 2025 because the filing was due starting the beginning of 2024 the penalty would be $225,852.00. Would you like that responsibility assigned to you by someone who is ill-informed?
All valid concerns. I know some accountants are doing this for the clients, but others are not. I do not believe it is a requirement of the accountant – just a service they might offer. The filing started on January 1st 2024, but business have until January 1st, 2025 to file. There is no penalty if you file before that date.