What Does the CTA, BOI and FinCEN Have to Do With Businesses in Fairmont, MN?
The Corporate Transparency Act (CTA) previously required most businesses to disclose Beneficial Ownership Information (BOI) to FinCEN, a measure aimed at curbing financial crimes such as money laundering and tax evasion.
However, as of December 3, 2024, a Texas federal district court’s preliminary injunction put this requirement on hold. If overturned, failure to file could lead to fines of $500 per day, up to a maximum of $10,000, and possible criminal penalties. Currently, no immediate action is necessary as a business owner. Read on for more details.
Potential Action Plan for Fairmont Business Owners:
1. Determine if your business must file.
Most LLCs, corporations, and similar entities need to file unless exempt (e.g., banks, charities, or publicly traded companies).
2. Identify your beneficial owners.
Beneficial owners are individuals who own at least 25% of the company or have significant control. Use ZenBusiness to simplify the process.
3. Gather required information.
Prepare details like names, dates of birth, addresses, and government-issued ID details for each beneficial owner.
4. File your BOI report electronically.
Existing companies (pre-2024): File by 01/01/2025.
New companies (formed in 2024): File within 90 days of formation.
New companies (2025+): File within 30 days of formation.
Get expert help from ZenBusiness to ensure compliance.
What You Need to Know About BOI Filing:
Who May Need to File?
"Reporting companies" include most small businesses, such as LLCs and corporations. Exemptions apply to banks, nonprofits, and publicly traded companies. For example, a family-owned restaurant in Fairmont organized as an LLC must file, but a local nonprofit providing community services would not.
Who is a Beneficial Owner?
A beneficial owner is someone who:
Owns 25% or more of the company, OR
Exercises substantial control over operations.
For instance, if three partners co-own a Fairmont-based bakery, each holding a 33% share, all three must be reported as beneficial owners.
What Information is Required?
Businesses need to provide:
Company information: Name, address, and EIN.
Beneficial owner details: Name, date of birth, residential address, and government-issued ID (e.g., driver’s license or passport).
This ensures compliance and promotes transparency in business operations.
How and When to File?
All BOI reports must be submitted electronically through FinCEN’s secure system. Deadlines are:
Existing businesses (pre-2024): File by 01/01/2025.
New businesses (formed in 2024): File within 90 days of registration.
New businesses (formed in 2025+): File within 30 days of registration.
Potential Penalties for Non-Compliance:
Don’t be alarmed! No further action is necessary if you choose not to file your BOI at this time. Why? Because a Texas federal district court’s preliminary injunction puts this requirement on hold. If overturned at a later date, failure to file or providing false information may result in:
Daily fines of $500, capped at $10,000.
Potential imprisonment for willful violations.
A 90-day safe harbor allows businesses to correct errors without penalties.
ZenBusiness Can Help:
ZenBusiness offers:
Start your BOI filing with ZenBusiness right now!
Additional BOI Resources:
Help us and our Chamber by completing a quick BOI survey by December 18, 2024! It only takes a few minutes, and for every 25 responses, our Chamber earns a $100 donation. [Click here to take the survey!] We appreciate your time and participation!
*As of December 3, 2024, a Texas federal district court has issued a preliminary injunction for all states to block the CTA and its relevant regulations. However, filing your BOI will help you avoid fines if this injunction is overruled.
