In a significant stride towards financial transparency, the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) has initiated the acceptance of beneficial ownership information reports mandated by the bipartisan Corporate Transparency Act, enacted in 2021. This groundbreaking effort aims to compel companies operating within the United States to disclose crucial information about the individuals ultimately owning or controlling these entities.

Treasury Secretary Janet Yellen emphasized the urgency of this initiative, stating, “Corporate anonymity enables money laundering, drug trafficking, terrorism, and corruption. It harms American citizens and puts law-abiding small businesses at a disadvantage. Having a centralized database of beneficial ownership information will eliminate critical vulnerabilities in our financial system and allow us to tackle the scourge of illicit finance enabled by opaque corporate structures.”

The Corporate Transparency Act addresses the serious consequences of corporate anonymity, which facilitates illicit activities that pose a threat to national security and the integrity of the financial system. By requiring companies to divulge ownership information, the act aims to curb money laundering, drug trafficking, terrorism, and corruption, safeguarding both citizens and law- abiding small businesses.

Starting January 1, 2024, all existing companies, except those who are exempt, must provide the names, addresses, and photo IDs of any person who owns or controls at least 25% of the company. The deadline for reporting this information is January 1, 2025. BOI Reports are filed at https://boiefiling.fincen.gov/. Companies created after January 1, 2024 have 90 days from their registration date to submit BOI reports. But starting in 2025, new companies only have 30 days to file their reports. All companies must update their reports for changes in address, ownership, and control.

A person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. They may also be subject to criminal penalties of up to 2 years imprisonment and a fine of up to $10,000.

Potential violations include:

• willfully failing to file a beneficial ownership information report;
• willfully filing false beneficial ownership information; and
• willfully failing to correct or update previously reported beneficial ownership information If you need help filing your BOI report, call Cantrell & Cantrell, PLLC – Houston’s premier tax law firm at (713) 333-0555.