REMINDER! Mandatory Reporting Deadline under the Corporate Transparency Act

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Corporate Transparency Act

This is big reminder for every small business owner.

Under U.S. Corporate Transparency Act (CTA), most corporations, limited liabilty companies and other legal entities, including homeowners’ associations (HOAs), condominium associations, and co-op associations, are required to file Beneficial Ownership Information (BOI) with the U.S. Financial Crimes Enforcement Network (FinCEN) by no later than January 1, 2025.  Every U.S. business must register and file this report.

The BOI report can be submitted online at www.FinCEN.gov.  This law is intended to provide the government with ownership information of every business so the government can determine if there are any foreign investors.  It is intended to protect against foreign interests taking control of U.S. based businesses.

Key Requirements

  1. Initial Report: Entities subject to the CTA must file an initial BOI report by the January 1, 2025, deadline.
  2. Updates to BOI: After the initial filing, community associations and other reporting entities must update their BOI within 30 days of any change in beneficial ownership.
  3. Penalties for Non-Compliance: Entities that fail to comply may incur significant penalties, including fines up to $5,000 per violation.

What Constitutes Beneficial Ownership (“BOI”)?

The BOI report must include details about any individual who is a “Beneficial Owner” of the entity, defined by the CTA as anyone who:

  • Exercises substantial control over the entity, or
  • Owns or controls at least 25% of the entity’s ownership interests.

In community association contexts, FinCEN’s guidance (updated through September 10, 2024) clarifies that a Beneficial Owner may include:

  • A senior officer of the association,
  • An individual with the authority to appoint or remove officers or a majority of directors,
  • An individual with significant decision-making authority, or
  • Any person with substantial control over the association.

If no individual meets the 25% ownership threshold, FinCEN still requires the identification of at least one individual who exercises substantial control over the association.

How to File

Please visit www.FinCEN.gov to complete the BOI report and ensure compliance with the CTA. Our office is available to assist with any questions or clarification needed on these requirements.

We encourage all clients to review their obligations carefully to ensure timely and accurate filing and avoid unnecessary penalties.