From the SEMA Washington, D.C., office
Join the Small Business Legislative Council on October 10 for a webinar to hear attorneys from Barnes & Thornburg discuss reporting requirements under the Corporate Transparency Act (CTA), which requires companies to file a report with the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) on their beneficial owners before January 1, 2025.
Click here to register for the webinar, which takes place on October 10 from 2:30 p.m. to 3:30 p.m. EDT. This webinar is a free member benefit for SEMA members.
Importantly, this webinar will thoroughly explain the reporting requirements under the CTA along with the three primary exceptions to the statute that small businesses can use to exempt themselves from FinCEN's burdensome reporting:
- Employ more than 20 employees.
- Operate at a physical office in the United States.
- Filed federal tax returns demonstrating more than $5 million in gross receipts or sales.
The CTA, enacted in 2021, was passed to enhance transparency in entity structures and ownership to combat money laundering, tax fraud, and other illicit activities. The CTA took effect on January 1, 2024 and imposed reporting obligations on all business entities within the scope of the "reporting company" definition under the statute. Entities that do not fall within one of the CTA's categories of exemptions will be required to file a beneficial ownership information (BOI) report with the U.S. Department of the Treasury's Financial Crimes Enforcement Network by December 31, 2024.
The CTA defines a "beneficial owner" as an individual who, directly or indirectly, exercises substantial control over the reporting company or owns or controls at least 25% of the ownership interests of the reporting company. An individual exercises "substantial control" over an entity if the individual:
- Serves as a senior officer.
- Has authority over the appointment or removal of a senior officer or a majority of the board of directors.
- Directs, determines or has substantial influence over important business decisions.
Beneficial ownership information reporting is not an annual requirement. A report only needs to be submitted once, unless the filer needs to update or correct information. Generally, reporting companies must provide four pieces of information about each beneficial owner:
- Name
- Date of birth
- Address
- The identifying number and issuer from either a non-expired U.S. driver's license, a non-expired U.S. passport or a non-expired identification document issued by a State (including a U.S. territory or possession), local government, or Indian tribe. If none of those documents exist, a non-expired foreign passport can be used. An image of the document must also be submitted.
Companies must also submit certain information about themselves, such as their name(s) and address. In addition, reporting companies created on or after January 1, 2024, must submit information about the individuals who formed the company ("company applicants").
Filers can also view informational videos and webinars, find answers to frequently asked questions, connect to the contact center and learn more about how to report at www.fincen.gov/boi.
Webinar Details: "Small Business and the Corporate Transparency Act"
Date: Thursday, October 10, 2024
Time: 2:30-3:30 p.m. EDT
Register: All SEMA member companies can listen to the webinar for free and should register by using this link.
Go Deeper: Barnes & Thornburg attorneys previously published an alert on the CTA reporting requirements that can be found at this link.
For more information, contact Eric Snyder, SEMA's senior director of federal government affairs, at erics@sema.org.