In 2021, Congress passed the Corporate Transparency Act (CTA). This law creates a new beneficial ownership information reporting requirement wherein the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has been tasked with collecting "beneficial ownership information" on all private companies. FinCEN has already been regulating some of our clients with international exposure because of the FATCA regulations and now they are attempting to collect similar information on almost ALL U.S. private companies.
This affects almost all of our clients. We have been delaying notifying clients about the requirement because we believe that the law will be found unconstitutional and have been hoping for a further delay in it's implementation. The law has actually already been found unconstitutional [National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)]***, but unfortunately the Judge in the case only prohibited FinCEN from enforcing the implementation of the CTA against the plaintiffs in the case. Further legal action or Presidential Executive action will be required to protect the rest of the public from the Act.
The CTA, went into effect on January 1, 2024, and requires most non-public U.S. companies to report all “beneficial ownership” of 25% or more AND Any other individuals who exercise substantial control over the company (Such as Company Officers and Managers) to FinCEN. All non-exempt companies formed before January 1, 2024, are required to complete the filing by December 31, 2024, or face possible penalties including a fine of up to $500 per day... although our hope is that the filing requirement will be permanently stayed (retro-actively).
The CTA has very few exceptions from its filing requirements. One such exemption is the “large operating companies,” wherein to qualify a company must have (i) 20+ U.S. based full-time employees, (ii) a physical office in the U.S., and (iii) reported more than $5M in gross receipts or sales on its previous year’s tax return. Wholly owned subsidiaries of exempt entities are also exempt from the filing requirements.
The CTA does NOT make “Nominee Services” illegal, and we still intend to provide nominee services to protect our client’s information from entering into the Public Domain. The FinCen BOI Report is NOT public record but it is currently a required filing For simplicity purposes you can think about this like an IRS filing – it is required but not available to the public.
We have developed our Beneficial Ownership Information Report (BOI) filing service to streamline the filing process and ensure your business remains compliant with federal regulations. Our service is fast, secure, and user-friendly, providing a reliable and efficient solution to meet the filing deadline. We do not provide legal or financial advice.
Our FinCen BOI filing service is $100.00 to make the electronic filing report about your company's beneficial ownership information to FinCEN through the government secure filing system. We already have most of the necessary information about your company to do so, HOWEVER we will need YOU to provide an Individual FinCen ID for EACH 25% beneficial owner and individuals who exercise substantial control over the company.
An Individual FinCen ID can be obtained here: https://fincenid.fincen.gov/landing
To obtain this number you will need to enter your name, address and upload a photo ID. You are NOT required to provide your social security number. To avoid any delay in filing, please obtain a number ASAP and email it along with your name and company name to: support@incorporate123.co
The filing service applies to EACH COMPANY that you have with us. Because time is of the essence we are issuing invoices immediately to all existing clients. We will be sending email reminders throughout December 2024.
Please also advise if you wish to make any changes to your company's ownership or management structure BEFORE making the Filing.
If your company is a member of the National Small Business Association (as of March 1, 2024), or your company meets the requirements for an exemption to filing, please advise us ASAP.
Please NOTE: There are NO changes to our regular procedures and filings. This is an extra filing currently required because of the Corporate Transparency Act.
Otherwise, please do not hesitate to contact us should you have any questions or concerns.
***National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)
On March 1, 2024, in the case of National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.), a federal district court in the Northern District of Alabama, Northeastern Division, entered a final declaratory judgment, concluding that the Corporate Transparency Act exceeds the Constitution’s limits on Congress’s power and enjoining the Department of the Treasury and FinCEN from enforcing the Corporate Transparency Act against the plaintiffs. The Justice Department, on behalf of the Department of the Treasury, filed a Notice of Appeal on March 11, 2024. While this litigation is ongoing, FinCEN will continue to implement the Corporate Transparency Act as required by Congress, while complying with the court’s order. Other than the particular individuals and entities subject to the court’s injunction, as specified below, reporting companies are still required to comply with the law and file beneficial ownership reports as provided in FinCEN’s regulations.
FinCEN is complying with the court’s order and will continue to comply with the court’s order for as long as it remains in effect. As a result, the government is not currently enforcing the Corporate Transparency Act against the plaintiffs in that action: Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024). Those individuals and entities are not required to report beneficial ownership information to FinCEN at this time.
