It is now time to complete your required filings under the Corporate Transparency Act (CTA). The court challenges seem to be completed, and the rule is still in effect, with a deadline of January 1, 2025, which is prior to the time when we will change administrations. There are substantial fines for failing to follow this rule, so get your registration done right away!
We discussed the background and the details of this rule in April, so we won’t repeat all that information in this article, but back in April we advised waiting until later in the year to make the filing. Later is now, and it is time to get your filing done!
If you have not already done so, you should check with your accountant to be sure you are subject to this rule, but almost all, if not all the gins in Texas will be subject to the rule. The next step is to register your company with the system, and then to enter the beneficial owner information (BOI).
Beneficial Owner has a very specific meaning. This is one who (directly or indirectly), exercises either 1) substantial control over the reporting company or 2) owns or controls at least 25% of the ownership interest of the reporting company. So, this is likely to include senior officers, managers, and similar employees with substantial influence over the operation, but the rule does say that simply being a member of the board of directors is not a qualifying event. In many cases, none of the actual owners will own enough of the company to be subject to reporting.
From one point of view, the rule is fairly simple – identify your beneficial owners and register your company with a list of all these folks. This may not go well for some members, who are going to be put into a position of having to ask their owners for a copy of their driver’s license so that they can put the owner’s information in the FinCin Web Portal. That part is very likely to give some of the owners some heartburn, to put it mildly.
If your company is subject to the rule and was in place prior to 2024, then you have until January 1, 2025 to report, but a new company formed this year, and subject to the rule, will have 90 days to report. To report, you set up an account with the Financial Crimes Enforcement Network under the US Dept of Treasury. To get more information you can click here.
As always, please give your Association office a call if you have any questions about this or any other issue affecting your operation.
