# A Beginner’s Guide to the Corporate Transparency Act (CTA)
In preparation for 2024, the Corporate Transparency Act (CTA) is set to make a profound impact on businesses nationwide. The act requires certain companies to start reporting beneficial owner information to the Treasury’s Financial Crimes Enforcement Network (FinCEN) as part of beneficial ownership information (BOI) reporting.
## What is the BOI Reporting Rule?
Under FinCEN’s BOI Reporting Rule, certain companies must report company and beneficial owner information. This includes the business’s taxpayer identification number (TIN) and copies of each beneficial owner’s identification document, such as a passport or U.S. driver’s license.
Failing to file the BOI report can result in significant penalties, including civil penalties of up to $500 per day for willfully failing to report accurate information, as well as criminal penalties of up to $10,000 and jail time.
## Does the BOI Reporting Rule Apply to Your Business?
This rule will affect a large number of businesses, with an estimated 32.6 million BOI filings expected in 2024. The rule applies to domestic companies structured as a corporation, limited liability company (LLC), or another entity that was created by filing a document with a secretary of state or similar office. It also applies to foreign entities created to do business in the United States.
Some exemptions apply, which can be found in FinCEN’s Small Entity Compliance Guide.
## Okay, the Rule Applies to Your Business—Now What?
If the BOI rule applies to your business, your company is known as a “reporting company” and is responsible for filing an electronic report with FinCEN about your business and its beneficial owners. Beneficial owners are individuals who either have substantial control over the company or own or control at least 25% of the company’s ownership interest.
Existing businesses will need to file by January 1, 2025, while new businesses have 90 days from the creation/registration date to file the BOI report.
## Where Can You Obtain More Information?
For more information on the beneficial ownership information reporting rule, visit the following resources:
– [FinCEN’s Frequently Asked Questions](https://www.fincen.gov/boi-faqs)
– [FinCEN’s Small Entity Compliance Guide](https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide_FINAL_Sept_508C.pdf)
– [Beneficial Ownership Information homepage](https://www.fincen.gov/boi) (where you can access the filing portal when it opens)
It’s important for businesses to be aware of the new beneficial ownership rule and to understand the reporting requirements to ensure compliance.