The CTA, BOI and FinCEN: What Does This Mean for New Ulm, MN Businesses?
The Corporate Transparency Act (CTA) requires businesses to report Beneficial Ownership Information (BOI) to FinCEN to enhance financial transparency and prevent illicit activities.
While a Texas federal district court’s preliminary injunction puts this requirement on hold, many experts expect that to be overturned. In that event, failure to file could lead to fines of $500 per day, up to a maximum of $10,000, and possible criminal penalties.
What You Need to Do:
1. Determine if Your Business Must File.
Most LLCs, corporations, and small businesses are considered "reporting companies." Exceptions include publicly traded companies and certain regulated entities.
2. Identify Your Beneficial Owners.
Beneficial owners are individuals who hold substantial control or 25% or more ownership of the company. For instance, the owner of a New Ulm brewery with a 35% stake and decision-making authority qualifies as a beneficial owner.
3. Gather the Required Information.
Prepare:
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Business name, address, and EIN.
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Beneficial owners’ names, addresses, DOBs, and ID details.
4. File Your BOI Report.
Deadlines:
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Existing businesses: File by 01/01/2025.
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New companies (2024): File within 90 days of formation.
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New companies (2025+): File within 30 days of formation.
Let ZenBusiness make the filing process smooth and hassle-free to ensure your compliance.
Key BOI Filing Details:
Who Needs to File?
"Reporting companies" include most LLCs, corporations, and small businesses in New Ulm. Exemptions apply to publicly traded and some regulated entities. For example, a family-run hardware store in New Ulm would likely need to file, while a large, publicly traded retailer would not.
What Is a Beneficial Owner?
A beneficial owner is someone who:
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Exercises substantial control over the business, OR
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Owns 25% or more of it.
For example, a co-owner of a New Ulm bakery with a 50% stake and key decision-making power qualifies as a beneficial owner.
What Information Is Needed?
You’ll need to provide:
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Business name, address, EIN.
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Owners’ names, addresses, DOBs, and identification details.
How and When to File:
BOI reports must be submitted electronically to FinCEN. Deadlines:
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Existing companies: File by 01/01/2025.
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2024 startups: File within 90 days of formation.
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2025+ startups: File within 30 days of formation.
Penalties for Non-Compliance:
Currently, a Texas federal district court’s preliminary injunction has put this requirement on hold, so businesses may not need to take any action at this time. However, in the event this injunction is overturned, failure to file could lead to fines of $500 per day, up to a maximum of $10,000, and possible criminal penalties.
If you choose to go ahead and file your BOI report, ZenBusiness is here to help you complete your filing efficiently.
Additional Resources:
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We Want to Hear from You!
Your input makes a difference! Take a few minutes to complete our BOI survey by December 18, 2024, and for every 25 responses, our Chamber will receive a $100 donation. [Take the survey here!] Thank you for supporting our Chamber and sharing your feedback!
*As of December 3, 2024, a Texas federal district court has issued a preliminary injunction for all states to block the CTA and its relevant regulations. However, filing your BOI will help you avoid fines if this injunction is overruled.
