The business world is facing a significant shift in transparency requirements, and if you own or operate a company, this directly affects you. The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has rolled out mandatory filing requirements under the Corporate Transparency Act (CTA) that began January 1, 2024. Just recently, on July 8, 2024, they released additional guidance that’s causing many business owners to take a closer look at their obligations.
The New Reality of Business Transparency
Think of the Corporate Transparency Act as a new chapter in how businesses operate in the United States. Whether you’re running a long-established corporation or just starting a new venture, these requirements apply to you. The goal is simple: create more transparency in business ownership, but the implementation? That’s where things get interesting.
Understanding Your Filing Timeline
The clock is already ticking, and your deadline depends on when your business was established:
- Existing companies (formed before January 1, 2024): Must file by January 1, 2025
- Companies created in 2024: Must file within 90 days of creation/registration
- Companies created in 2025 or later: Must file within 30 days of creation/registration
The Dissolution Dilemma
Here’s where recent developments have caught many business owners off guard. You might think that dissolving your business exempts you from these requirements, but FinCEN’s latest guidance says otherwise. If your company existed for even a single day after January 1, 2024, you’re still required to file.
True dissolution requires completing ALL of these steps:
- Filing dissolution paperwork with your jurisdiction
- Receiving written confirmation
- Paying all related taxes and fees
- Ceasing all business operations
- Winding up affairs (including closing all bank accounts)
The Cost of Non-Compliance
The penalties for non-compliance are designed to ensure businesses take these requirements seriously:
- Civil penalties up to $5,000 for each violation
- Each day of non-compliance counts as a separate violation
- Criminal penalties including imprisonment up to 5 years
- The Treasury Department can bring civil action against violators
Navigating Complex Scenarios
The business world isn’t always straightforward, and FinCEN recognizes this. For instance, you might qualify for the “inactive entity” exemption if your company meets specific criteria:
- Existed on or before January 1, 2020
- Not engaged in active business
- No changes in ownership in the preceding 12-month period
- Limited financial activity
Mergers and acquisitions bring their own complexity. Even if your company was formed as a transitory merger subsidiary and has since been terminated, you’re still required to file if you existed after January 1, 2024. However, there is some good news: once you file your initial BOIR, you won’t need to file an additional report if your company later ceases to exist.
The Path to Compliance
Key questions every business needs to address:
- Who qualifies as a beneficial owner?
- Who’s responsible for preparing and submitting the BOIR?
- What information needs to be included in the filing?
- How do dissolved companies determine who should be reported?
For active companies, current leadership must ensure compliance. For dissolved companies, proper identification of who should prepare and submit the BOIR becomes crucial.
Looking Ahead
As with any major regulatory change, we can expect continued evolution in how these requirements are interpreted and enforced. FinCEN continues to provide clarification through FAQs, and further guidance may be forthcoming. The key is staying informed and taking proactive steps toward compliance.
Important considerations moving forward:
- Monitor for additional FinCEN guidance
- Stay aware of filing deadlines
- Maintain accurate beneficial ownership records
- Consider seeking professional guidance for complex situations
Taking Action
These new requirements represent a significant change in how businesses operate and report ownership information. The complexities involved and the severe penalties for non-compliance make it crucial to understand and meet these obligations head-on. Whether your business is active, dissolving, or already dissolved, the time to act is now.
How Counxel Can Help
At Counxel Legal Firm, we understand these new FinCEN requirements can feel overwhelming. That’s why we’ve specifically designed our Counxel On-Call program to help business owners navigate these complex regulations with confidence.
Through Counxel On-Call, for just $99/month, you receive:
- Reliable guidance on FinCEN filing requirements
- Help determining your business’s specific obligations
- Assistance identifying and documenting beneficial owners
- Support with BOIR preparation and filing requirements
- Ongoing compliance monitoring and updates
- Protection from costly mistakes and penalties
If you sign up for Counxel On-Call then included as part of your $99/month membership fee we will file a FINCen report for your company (typically this is $350 on its own) now ONLY through the end of the year!
Plus, every monthly payment builds $1,200 in credit towards major legal services after your first year, ensuring you’re prepared for any significant legal needs that arise.
Don’t let the Corporate Transparency Act requirements become your next legal challenge. Join the many business owners who trust Counxel On-Call to protect their interests and ensure compliance with these critical new regulations.
Ready to ensure your business meets all FinCEN requirements? Learn more here or contact us at 480-536-6122 to learn more about how Counxel On-Call can help you navigate these new regulations while saving thousands in legal fees.
