The Corporate Transparency Act may require certain U.S. companies to disclose beneficial ownership information to FinCEN to combat financial crimes.

While a Texas federal district court’s preliminary injunction puts this requirement on hold, many experts expect that to be overturned. In that event, failure to file could lead to fines of $500 per day, up to a maximum of $10,000, and possible criminal penalties.

However, filing your Beneficial Ownership Information (BOI) report will help you avoid fines if this injunction is overruled. Waiting could mean scrambling to meet compliance requirements or penalties. By taking proactive measures now, businesses can address compliance concerns with the straightforward and accurate assistance of ZenBusiness.

1. Determine if Your Business Must File.

A ‘reporting company’ is any business, corporation, or LLC that is registered with the state, unless exempt. Exemptions apply to publicly traded companies, banks, and charities. For example, a local coffee shop in Long Beach, CA would likely need to file a BOI report.

2. Identify Your Beneficial Owners.

A ‘beneficial owner’ is someone who either has substantial control over a company or owns at least 25% of it. For example, in Long Beach, a co-owner of a custom printing service business who designs marketing strategies and holds 40% ownership qualifies as a beneficial owner.

3. Gather the Required Information.

Prepare:

• Business name, address, and EIN.

• Beneficial owners’ names, addresses, DOBs, and ID details.

4. File Your BOI Report.

Deadlines:

• Existing businesses: File by 01/01/2025.

• New companies (2024): File within 90 days of formation.

• New companies (2025+): File within 30 days of formation.

ZenBusiness helps businesses tackle the BOI reporting process, ensuring they secure compliance with FinCEN requirements efficiently.

Additional Resources:

• FinCEN FAQ

• Beneficial Ownership Report Guide

• Completing the Beneficial Ownership Information Form

• Who’s Exempt from the Corporate Transparency Act?

• Details on Preliminary Injunction

• BOI Filing for Small Businesses

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As of December 3, 2024, a Texas federal district court has issued a preliminary injunction for all states to block the CTA and its relevant regulations. However, filing your BOI will help you avoid fines if this injunction is overruled.