CORPORATE TRANSPARENCY ACT

The Corporate Transparency Act went into effect on January 1, 2024. There has been legal activity throughout the year, which called into question whether or not it was going to be enforced, but as of now, it is here to stay.

It requires all corporations, single member LLCs, multi member LLCs, and other entities to report their ownership status to FinCen, the Treasury Department’s Financial Crimes Enforcement Division.

Here is what you need to know:

• It is REQUIRED.
• It is a one-time report UNLESS your company undergoes any changes in ownership, address, or status. 
• There are significant penalties for not meeting the reporting requirement. Penalty is $591/day plus $10,000 criminal fine and potentially 2 years of prison time. 
• For all entities in existence prior to 1/1/2024 the reporting deadline is 12/31/2024.
• For all entities in existence after 1/1/2024, the deadline is 90 days after the state acknowledgement of the entity. Most states sent out documentation to this effect with the organizational papers. 
• Starting in 2025, all new entities will have 30 days to report. 

What are you reporting?

• Everyone with at least 25% ownership.
• Anyone who exercises substantial control in your entity. Substantial control includes anyone who is not an owner but can make significant decisions on your behalf for your company. 

This is not a tax return related reporting requirement, so you can file the report yourself by going to the Treasury Department’s Financial Crimes Enforcement Website at  https://fincen.gov/boi --> File a report using the BOI E-filing system.

You may engage our services to complete the report for your company. This requires a signed engagement letter to outline the terms of the agreement and the completion of a questionnaire to provide us with the needed information.

If you want to engage PHFS LLC to assist you with this reporting requirement, please email admin@premocpa.com OR call the office at 302-875-4205.