Corporate Transparency Act

New Corporate Transparency Act (CTA) Requires Small Businesses to Report Beneficial Ownership Information (BOI) to the Federal Government

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Corporate Transparency Act - Mandatory Federal Filing, took effect January 1, 2024

API Processing - Corporate Transparency

Are you aware of these newly mandated CTA federal requirements?

Effective January 1, 2024, a mandatory Federal Law takes effect requiring most Corporations and LLC's to report significant ownership interest and/or controlling parties to the Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Department of Treasury.

The federal Corporate Transparency Act (CTA) requires Corporations and Limited Liability Companies to report information to the U.S. government about who ultimately owns and controls them. The CTA is intended to help prevent and combat money laundering, terrorist financing, corruption, and tax fraud. Unless exempt, Companies must file beneficial ownership reports with the Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Department of Treasury.

The reporting deadline for newly formed Corporations and LLC's is 90 days from initial set-up. Companies existing prior to 1/1/2024 have until 1/1/2025 to file. Significant penalties may apply for failure to submit the required BOI information on time.

It’s easy: We have you covered – let API handle your BOI filing!

API Processing, a full-service license processing firm with over 30 years experience in the electrical and construction industries, can easily handle your BOI reporting needs.

Our Fee is $159.00 - Complete the following Beneficial Owner Information (BOI) Reporting Form.

Fill out the BOI Form and Get Started Here

What is CTA? The Penalties? Who Qualifies? Reporting Requirements BOI Reporting Process

What is CTA?

The Corporate Transparency Act (CTA) Could Affect Your Small Business!

On January 1, 2024, the Corporate Transparency Act (CTA) comes into force, having an influence on millions of small enterprises nationwide. It is imperative for small businesses to comprehend the nuances of this legislation and its possible consequences. If not, failing to file or update this report could result in criminal or civil consequences for you as a small business owner.

The CTA, which went into effect in 2021, attempts to stop illegal conduct by gathering additional ownership data for certain American companies that are involved in or have access to the nation's market, such as tax fraud, money laundering, and financing for terrorism. The new law requires companies that fit specific requirements to send a Beneficial Ownership Information (BOI) Report, which includes information identifying persons connected to the reporting company, to the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury.

The CTA was created to stop people who have bad intentions from disguising or profiting from their U.S. entity ownership to support unlawful operations. Congress claims that this is a common technique that compromises economic integrity and national security.

The Penalties?

Beneficial Owners Must File with FinCen to Avoid Penalty

Since the CTA was passed to improve transparency in entity structures and ownership, violations of this law can result in a civil penalty of $500 per day the violation continues and criminal penalties of up to $10,000 and two years in prison.

The CTA requires beneficial owners – those with "significant control" over a firm -- to report their information to the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department in a significant effort to stop illegal entities from doing business in the US.

Who Qualifies?

Who is considered a beneficial owner of a company?

According to the CTA, an individual qualifies as a beneficial owner if they directly or indirectly have a significant ownership stake in a company. This person either has a major influence on the reporting company’s decisions or operations, owns at least 25% of the company's shares, or has a similar level of control over the company's equity.

Reporting Requirements

What information must be reported about a company’s beneficial owners?

The details that reporting companies need to include in the BOI report vary based on the date their business was established. Businesses registered or established post-January 1, 2024, must provide information regarding the business, its beneficial owners, and its company applicants, including owners’ and applicants’ (if applicable) names, addresses, birthdays, and identification numbers (such as a license or passport number), and the jurisdiction of the documents. However, businesses established before that date can omit information regarding company applicants.

All reporting companies must provide their legal name and trademarks, as well as their current U.S. address, which could be either the address of its main business site or, for foreign-based companies, their U.S. operational location. They’ll also need to provide a taxpayer identification number and specify the jurisdiction where they were formed or registered.

BOI Reporting Process

What is the beneficial ownership information reporting process?

Effective January 1, 2024, reporting companies will have a limited time to file their initial BOI reports. For qualifying reporting companies established before the above date, the filing deadline is January 1, 2025. Those created between January 1, 2024, and January 1, 2025, will have 90 days from either the actual notice of formation or public announcement, whichever comes first, to file. Businesses established on or after January 1, 2025, will have 30 days from notification or public announcement of their formation to submit their first report to FinCEN.

Two types of reporting companies will be required to submit BOI reports:

domestic reporting companies, including LLCs, corporations, and other entities formed through filing with a secretary of state or a comparable office in the U.S.
foreign reporting companies that are registered to conduct business in the United States through filing with a secretary of state or an equivalent office.

Corporate Transparency Act