As a general rule, all limited partnerships, corporations, and limited liability companies that were in existence before January 1, 2024, and have fewer than 20 full time employees AND had gross receipts or revenue not in excess of $5,000,000 in 2023 must file with FINCEN no later than December 31, 2024. For entities created in 2024, those entities must file within 90 days of receiving notice that the registration with the Secretary of State has been accepted. For entities created after December 31, 2024, the filing will have to be done within 30 days of receiving notice that the registration with the Secretary of State has been accepted.
The information that has to be reported is the following: the full legal name of the entity, and any DBA used by the entity; the address of the entity’s principal place of business; the Employer Identification Number of the entity; and information on each Beneficial Owner. A Beneficial Owner, as a general rule, includes the following: any individual who directly or indirectly owns at least a 25% interest in the entity; and any individual who has substantial control over the entity. Persons who have substantial control over the entity are generally going to be the officers of the entity, but may also include directors of a corporation or any other individual who has substantial control over the entity. For entities established after December 31, 2024, information will also have to be provided on the individuals who were responsible for and did the actual filing of the entity’s legal formation papers with the State. The information that will have to be filed concerning the Beneficial Owners and the individuals involved with the filing of the entity formation papers includes the following: the individual’s full legal name; the individual’s date of birth; the individual’s residential address; and either the individual’s U.S. passport number or the individual’s state driver’s license number. Additionally, a copy of the U.S. Passport or driver’s license will have to be included. For individuals that may be a Beneficial Owner of more than one entity, it is recommended that they obtain a FINCEN Number from FINCEN. The advantage of obtaining a FINCEN Number is that number can then be used in lieu of providing your personal information to each entity.
PLEASE BEWARE OF SCAMS. The reporting that has to be done must be online with FINCEN. The website for FINCEN is Fincen.gov. There is an entity that exists called the United State Business Regulations Department. This entity is not a U.S. governmental entity. This entity is sending out a form entitled Form 4022. This is not a governmental form. Also, this entity is requesting a filing fee of $117. There is no fee being charged by the Federal Government. Completing Form 4022 is not a filing with Fincen and only results in providing personal information to a scammer.
Failure to timely file with FINCEN will result in a $500 per day penalty, up to a maximum of $10,000, plus potential jail time. If you have any questions, our business attorneys are available to answer them. Also, for more detailed information on complying with the Corporate Transparency Act, please download the booklet entitled “Small Entity Compliance Guide” from Fincen at fincen.gov/boi/small-entity-compliance-guide
The post The Corporate Transparency Act – The Need to File and Avoid Being Scammed appeared first on Modrall Sperling Law Firm.
