Recently the Minnesota Secretary of State has contacted business owners advising them of reporting requirements under the Corporate Transparency Act, a federal statute. If you are unsure of your business’ requirements, let us provide you with an overview of what businesses are required to report and what information is required.
Learn More About the 2024 Corporate Transparency Act
The Federal Government enacted the bipartisan Corporate Transparency Act (“CTA”) in 2021 to combat money laundering and other illicit financial transactions. The CTA requires that most incorporated small businesses, such as LLCs and S-Corps, and some trusts file a Beneficial Ownership Information Report with the Financial Crimes Enforcement Network (“FINCEN”) before January 1, 2025.
A Small Entity Compliance Guide is available through FINCEN noting businesses required to submit a Beneficial Ownership Information Report. The guide can be found at: https://www.fincen.gov/boi/small-entity-compliance-guide .
The Beneficial Ownership Information Report discloses to FINCEN which people and entities own or financially benefit from an interest in an entity or certain trusts. FINCEN has a very easy and user-friendly online portal where any member or shareholder of a non-exempt organization can file the Beneficial Ownership Information Report in relatively little time. You can access FINCEN’s online reporting portal at the following link: https://boiefiling.fincen.gov/fileboir
What Do You Need to Report Your Beneficial Ownership Information?
The Beneficial Ownership Information Report contains three sections. Before you begin the disclosure or application process, you will need the following information:
- The full legal names, dates of birth, and addresses of all members or shareholders.
- Pictures or scans of each member or shareholder’s driver’s license or passport.
- The company’s Employee Identification Number (EIN).
- The company’s registered name and registered address.
Part I of the Beneficial Ownership Information Report requires the applicant to enter basic information about the reporting entity. This includes the company’s name, registered address, and EIN. If your entity does not have an EIN, you may use your SSN or an Individual Taxpayer Identification Number.
Part II of the Beneficial Ownership Information Reports requires the disclosure of information about the applicant, who is filling out the Beneficial Ownership Information Report on the entity’s behalf. Most applicants will start at question number 19 of this section and will merely enter their personal information. The applicant will have to upload a picture of his or her driver’s license or passport at question number 33 of Part II.
Part III of the Beneficial Ownership Information Report requires the applicant to enter the names, addresses, dates of birth, driver’s license numbers, and a copy of a state issued driver’s license (or unexpired passport) for all members or shareholders of the entity. If you own a single member LLC, you will be listed as the only beneficial owner. If there is more than one owner or shareholder, you will need to click the blue “Add Beneficial Owner” box on the top right of the webpage to add additional members.
The final portion of the report requires that the discloser certify the truth and accuracy of the disclosures.
Unfortunately, there are a lot of scams surrounding the Beneficial Ownership Information Report in which companies will offer to fill out the Beneficial Ownership Information Report for a company for a set fee. However, most people with basic computer skills will find the disclosure process simple and easy and will have no need to pay a third party to fill out the Beneficial Ownership Information Report on your behalf.
If you need assistance with completing this reporting requirement or have questions regarding the Act, Quinlivan & Hughes have experienced business attorneys who are here to assist your business. Please contact our office at 320-251-1414 for a quote.
