Corporate Transparency Act — Beneficial Ownership Information Reporting Requirements
Wright Law TX, PLLC wants to make you aware of new federal reporting requirements created under the Corporate Transparency Act (the “CTA”) that may affect you.
We can help you meet these requirements; see “Action Required” below.
The CTA requires certain business entities (each defined as a “reporting company”) to file, in the absence of an exemption, information on their “beneficial owners” with the Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of Treasury. The CTA is intended to provide law enforcement with beneficial ownership information for the purpose of detecting, preventing and punishing terrorism, money laundering and other misconduct through business entities.
What business entities are required to comply with the CTA’s BOI reporting requirements?
Entities organized both in the U.S. and outside the U.S. may be subject to the CTA’s reporting requirements. Domestic companies required to report include corporations, limited liability companies (LLCs), or any similar entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe.
There are certain exceptions and exemptions. For example, domestic entities that are not created by the filing of a document with a secretary of state or similar office are not required to report under the CTA.
What do BOI reports contain?
Beneficial ownership information (“BOI”) reports contain information about the entity itself and two categories of individuals:
(1) beneficial owners; and
(2) company applicants (if the reporting company was created after January 1, 2024).
In general, a beneficial owner is an individual who owns or controls at least 25 percent of a company or has substantial control over the company, and a company applicant is an individual who directly files or is primarily responsible for the filing of the document that creates or registers the company.
Deadline to File
A reporting company created before January 1, 2024 has until December 31, 2024 to file its initial report. A reporting company created after January 1, 2024, and before January 1, 2025, will have only 90 calendar days to file the initial report. A reporting company created on or after January 1, 2025, will have 30 calendar days to file its initial report. The responsibility for the required disclosures and reporting is that of the reporting company.
A reporting company is not required to file an annual report. After the initial report is filed, a reporting company need only file an update or correction to its BOI report within 30 calendar days of any change to any previously reported information.
Risk of non-compliance
There are potential civil and criminal penalties for willful violations of the BOI reporting requirements, and these penalties may be applied to the reporting company and/or individuals. As specified in the CTA, a person who willfully violates the BOI reporting requirements may be subject to: (i) civil penalties of up to $591 for each day that the violation continues; and/or (ii) criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.
Although the legal responsibility for the required reporting is that of the reporting company, Wright Law TX is prepared to assist you.
Action Required
Step 1: In order to request our assistance with the filing of your initial BOI report(s), please send an email to BOI@wrightlawtx.com with the following information: the full name of each reporting entity, including the state in which it was formed (e.g., Wright Law TX, PLLC, a Texas professional limited liability company).
Step 2: We will reply to your email with: (i) a limited engagement agreement stating that WLTX will file the beneficial ownership information you provide on behalf of your reporting company; (ii) a request for a retainer for each reporting company; and (iii) a specific list of information and items needed in order to file your BOI report(s).
Step 3: Once the requirements of Steps 1 and 2 are fully completed by you, including payment of our firm’s invoice, we will file the BOI report(s) and submit to you the initial report and the filed transcript so that you may retain this information in your records.
If you elect to have us assist you in filing the initial BOI report, it is imperative that you contact us and provide the required information as soon as possible. Because of the time sensitive nature of the CTA and the potential penalties for late filing, we will only accept completed filing requests through November 15, 2024. After November 15, 2024, requests received by our firm that are due on or before December 31, 2024, will either be denied or will be assessed an additional fee. Please remember, initial BOI reports filed by our firm will be filed solely based on the information provided to us. If we do not receive the required information from you, we will be unable to assist.
Additional information about the reporting requirements, including frequently asked questions, is available on FinCEN’s beneficial ownership information webpage at https://www.fincen.gov/boi. There is no fee for submitting your BOI report to FinCEN and filing can be done at the foregoing website.