As a small business owner, it’s essential to stay up-to-date with the latest legislation that can have an impact on your business. This year, Congress passed an updated version of a previous legislation called the Corporate Transparency Act 2024. In this blog, we will explore the new legislation to help you comprehend how it could potentially affect your finances this year.
What is The Corporate Transparency Act?
The Corporate Transparency Act (or CTA) was passed by Congress in 2021 in an attempt to reduce the amount of criminal behavior in the small business world. This Act is a part of the National Defense Authorization Act.1 By passing this new legislation, the hope was that law enforcement could stop unethical and illegal business practices like money laundering, financial terrorism, and tax fraud. In January of 2024, the government passed an updated version of the CTA that included reforms to the original legislation.
In a nutshell, The Corporate Transparency Act 2024 helps law enforcement gain more information about small businesses registered in the United States to make sure their business practices fall within legal boundaries.
How Does The Corporate Transparency Act Affect Me?
If you are the owner of a small business in the United States, it is important to comply with the Corporate Transparency Act. This involves filing a Beneficial Ownership Information (BOI) document through the Financial Crimes Enforcement Network (FinCEN). This document provides in-depth information about your small business, including company details, owner information, and applicant information.
All domestic and foreign companies are required by the FinCEN to submit their BOI form within a specific timeframe after being registered to do business. If you started your corporation, LLC, or another type of small business entity after January 2024, you will have 90 days to submit your application. However, if you began your foreign or domestic company before this year, you will have 30 days to submit the form.
Submitting this report shouldn’t affect your day-to-day business operations or cause any interruptions in your employment unless you work for a company or own a company that is operating outside the law.
To find out if your company is exempt or for more information, visit: https://www.fincen.gov/boi-faqs#C_2
How to Submit Your BOI Report
If your business is required to file, visit the FinCEN website to file online or by mail. Here’s the information you’ll need to fill out your report:
Company Information
- The business’s legal registered name.
- Any trade names that the business uses (DBA)
- The principal street address or address where the business conducts business in the US
- The state or Tribal jurisdiction where the company was formed or first registered.
- Tax ID number, and an identity document, such as a filed Articles of Incorporation or Organization.
- The state or Tribal jurisdiction where the company was formed or first registered.
Owner Information
- Your name, address, and date of birth
- Your identification number from a passport, driver’s license, or other form of ID
- Photo of ID along with the state where it was issued
It is not necessary to be the owner or operator of a business to file the BOI (Beneficial Ownership Information) to FinCEN. As an employee or third-party applicant, you are also eligible to apply. To do so, you will need to provide some personal information such as your name, date of birth, address, and identification details.
At SageSpring Wealth Partners, we understand the significance of staying informed about anything that could impact your financial stability. If you have any questions relating to submitting your BOI report or if you want to consult with one of our top-notch financial advisors, feel free to contact us today. We’ll be happy to help you.
Any opinions are those of SageSpring Wealth Partners and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification. Past performance is not indicative of future results.
The information contained herein has been prepared solely for informational purposes and is not intended as tax advice. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.
