Critter Corner: What Do I Need to Do to Comply with the Corporate Transparency Act?

Dear Kiwi and Mango,

I have an LLC that owns a rental property. I understand that I need to submit beneficial ownership information (BOI) to the US Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), per the Corporate Transparency Act (CTA) that was enacted on January 1, 2024. What do you know about this and what do I need to do? Is there any way to avoid it?

Thanks for your help!

Biz Nissowner

—

Dear Biz,

In 2021, Congress enacted the CTA, which required the US Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) to implement a beneficial ownership information (BOI) reporting requirement, as part of the establishment of a national beneficial ownership registry. On September 30, 2022, FinCEN released a final rule to implement the CTA’s reporting requirements, amended on November 29, 2023. The CTA went into effect on January 1 and applies to LLCs, corporations, and other business entities that are required to file annual reports with any state. You can file your BOI here.

What Information Must Be Reported?

If your rental property is a limited liability corporation (LLC), the CTA requires you to submit four pieces of information to FinCEN for each beneficial owner and individual who files an application to form a domestic entity or registers a foreign entity to do business.

These are:

• The individual’s full legal name
• Date of birth
• Current residential or business street address
• A unique identifying number from an acceptable identification document (e.g., a passport or driver’s license) or the individual’s FinCEN identifier. A FinCEN ID is a unique identifying number that FinCEN issues to individuals or reporting companies upon request. A beneficial owner or company applicant may apply for a FinCEN ID here.

How Much Time Do You Have to File?

LLCs, corporations, and other entities created by the filing of a document with a Secretary of State or similar office must submit information to FinCEN about the company and its beneficial owners as follows:

Existing companies have until January 1, 2025, to file a BOI report with FinCEN.

Newly formed or registered companies must file within either 90 days or 30 days of their formation or registration date, as follows:

A new reporting company that was created or first registered on or after January 1, 2024, and before January 1, 2025, must file an initial BOI report within 90 calendar days after receiving notice of the company’s creation or registration (actual or public notice).

An LLC, corporation, or other entity created or registered that was created or registered on or after January 1, 2025, will have 30 calendar days after receiving notice of the company’s registration to file a BOI report.

The CTA does not require reporting companies to file a report annually. The law only requires an initial filing, with updates and corrections as needed.

Reporting companies who do not report their beneficial owners are subject to both civil and criminal penalties against both the company and the individuals responsible for the violation.

All Beneficial Owners should directly register with FinCEN.

For more information, you can click here.

As mentioned, the BOI applies to corporations, LLCs, and certain other business entities. However, it does not apply to trusts. If you are concerned about your private information being out there, trusts are a much more powerful privacy tool than an LLC for owning assets such as rental property. Please read today’s Ask the Expert article for information on trusts for rental properties, and make an appointment with the Farr Law Firm to learn more about your options.

Hope this helps!

Kiwi and Mango