Business BOI Reporting
Do you have an LLC or business corporation? Then this post applies to you.
The Corporate Transparency Act (CTA) is a law that requires certain companies to disclose information about their beneficial owners (BOI). The CTA was enacted in 2021 to prevent money laundering, terrorism, and other misconduct. It also aims to help law enforcement detect and punish these crimes.
Ready to file?
Time to File?
At CMR Associates, we’re here to help you navigate the increasingly complicated process of complying with State and Federal information filing requirements. BOI reporting is no exception.
- What Business Entities Need to File?
The CTA applies to corporations, limited liability companies, and other similar entities that are formed or registered to do business in the United States. - Who are Beneficial Owners?
Beneficial owners are individuals who exercise substantial control over the company, Own or control at least 25% of the company’s ownership interests, and receive substantial economic benefits from the company’s assets. - What are the Penalties?
The CTA imposes civil and criminal penalties for providing false or fraudulent information or failing to provide complete or updated information. Penalties include: A fine of up to $10,000, Imprisonment for up to two years, A $591 per diem penalty, adjusted for inflation. - Is this Reporting Requirement Unconstitutional?
Maybe. On March 1, 2024, a federal district court in Alabama ruled that the Corporate Transparency Act (CTA) is unconstitutional. The U.S. District Court for the Northern District of Alabama ruled the CTA unconstitutional in the case National Small Business United d/b/a the National Small Business Association, et al v. Janet Yellen. The court ruled that the CTA exceeded Congress’s legislative powers and lacked a sufficient connection to any enumerated power. The court also found that the CTA converted a lot of local conduct into a federal matter, which involved a substantial extension of federal police resources. - Do you Need to File?
You are ultimately responsible for the decision to file or not to file. As of November 22, 2024, if you are not a member of the National Small Business Association, current law says you are likely required to file. However, CMR Associates is not a law firm, and the above information is not legal advice. If you are concerned about government overreach, please contact your elected officials. If you need legal advice, contact an attorney.
We’ve been getting a lot of questions about BOI Reporting. The questions are, “Is it unconstitutional, are there really these exorbitant fines, do I need to file.”
I am not an attorney but my answer is “Yes!”
– Charles Renwick, CPA