SOUTH DAKOTA COUNSELING ASSOCIATION

We wanted to take a moment and make sure that our members, who many of you are small business owners, are aware of a new requirement from the US Treasury Department. 

The new reporting requirement is called "Beneficial Ownership Information" and it is mandated by the Corporate Transparency Act or "CTA". The CTA was enacted on January 1, 2021, as part of the National Defense Authorization Act, and effectively created a national beneficial ownership registry. The CTA is a broad statute that requires most businesses to report their beneficial owners and "applicants" to the Treasury Department's Financial Crimes Enforcement Network or "FinCEN", in an attempt to prevent the use of shell companies to evade anti-money laundering rules or to hid other illegal activities. FinCEN is responsible for safeguarding the U.S. financial system from illicit use. 

Complying with the CTA is very important as there are both civil and criminal penalties for willfully violating the Act, which could include (1) civil penalties of up to $500 per day; and (2) a fine of up to $10,000 and/or up to 2 years imprisonment. To comply with the CTA, beneficial owner information must be reported to FinCEN. 

For entities created or registered to do business before January 1, 2024, an initial report must be filed by January 1, 2025. For entities created or registered after January 1, 2024, an initial report must be filed within 90 calendar days of receiving notice of the creation or registration of the entity. 

There is no filing fee associated with the filing of the Beneficial Ownership Report through FinCEN. 

The information you will need about the Reporting Company is: 

• the full legal name of the Company; 
• any trade names or "doing business as" names
• the current street address of the Company's principal place of business; 
• the state or jurisdiction where the company was formed or is registered; 
• the employer identification number (EIN)

The information you will need for each Beneficial Owner is: 

• full legal name, date of birth, and residential street address (no PO boxes)
• a unique identifying number from an acceptable identification document, such as driver's license, identification card, or passport (none may be expired)
• an image of the identifying document that verifies the unique identifying number

You can file your report with FinCEN at any time here: boiefiling.fincen.gov/fileboir 

If your reporting company's information changes, you must file a report amendment within 30 days. Examples include a move, or an identifying document expires. 

For more information on the CTA and FinCEN, please visit FinCEN's Youtube page: www.youtube.com/@fincentreasury/videos

For step by step instruction on how to file your BOI report: www.youtube.com/watch?v=HxBmPsF5Ufc

For help filing your report if you do not want to do it yourself, we recommend reaching out to your CPA or attorney.