LLCs and Small Business Owners: Be Sure to File Beneficial Ownership Information Report to Comply with CTA

January 1, 2024 ushered in a new regulatory scheme for small business owners across the United States with the Corporate Transparency Act (CTA). The CTA seeks to combat illicit activity involving tax fraud, money laundering, and terrorism financing, but brings new burdens for owners of limited liability companies (LLCs), corporations, and other business entities (referred to as “reporting companies” by the CTA) created by a filing with a secretary of state or similar office under state or tribal law.

Each reporting company is required to submit a Beneficial Ownership Information Report (BOIR), unless the entity qualifies for under one of the 23 exemptions. Most of the exempt categories pertain to already heavily regulated organizations, such as banks, credit unions, tax-exempt entities, public corporations, and large operating companies. The BOIR will be submitted online with the Financial Crimes Enforcement Network (FinCEN), a bureau within the US Department of Treasury.

WHOSE INFORMATION IS SUBMITTED IN A BOIR REPORT?

A BOIR must contain information about the entity itself and two categories of individuals: beneficial owners and company applicants (although note that company applicant information is not required for entities formed before January 1, 2024).

WHEN ARE THE BOIRS DUE?

• Reporting companies created or registered to do business before January 1, 2024 must file the report by January 1, 2025.
• Reporting companies created or registered on or after January 1, 2024 and before January 1, 2025 must file the report within 90 calendar days after the company’s creation.
• Reporting companies created on or after January 1, 2025 must file the report within 30 calendar days after the company’s creation.

AMENDED AND UPDATED REPORTS

Currently, the CTA does not require annual reports, but it does require updates when there are changes to previously reported information (or when the previously filed report is determined to have been inaccurate). Updated and corrected reports are due within 30 calendar days after the change or when the reporting company is aware or has reason to know of the reported inaccuracy.

FILING

BOIRs will be submitted electronically via FinCEN’s filing system, which is now available at the BOI E-Filing System on FinCEN’s website. Further guidance for filing is available at

• FinCEN | Frequently Asked Questions
• FinCEN | Small Entity Compliance Guide

HOW WE CAN HELP

Please be aware that there are civil and criminal penalties for non-reporting. While Morgan Lewis cannot file BOIRs on your behalf, we can assist in determining the beneficial owners and company applicants of your entities to assist with the filing. If you would like Morgan Lewis to advise you regarding the required filings under the CTA, please contact Sara A. Wells as soon as possible.