• Services
  • Attorneys
  • Media & Insights
  • Online Payment
Results may vary depending on your particular facts and legal circumstances. No aspect of this advertisement has been approved by the Supreme Court of New Jersey. A description of the selection methodology can be found here.
  • Services
  • Attorneys
  • Media & Insights
  • About Us
  • Delivering Value
  • Diversity & Inclusion
  • Meritas
  • Contact Us
  • Online Payment
    A
    Alternative Dispute ResolutionAntitrust & Trade RegulationAppellate Practice
    B
    Banking & Financial ServicesBankruptcy, Creditors’ Rights, and Financial RestructuringBeer LawBusiness Law
    C
    Cannabis LawConstruction LawCooperative and Condominium Law (Co-op & Condo)Criminal Defense
    E
    Economic Development LawElder Care & Special Needs LawElectronic Discovery ("E-Discovery")Environmental LawERISA & Employee BenefitsEstate Planning and Administration & Wealth PreservationExecutive Compensation and Employment Strategies
    F
    Food, Beverage & HospitalityFranchise Law
    H
    Health Care & Life SciencesHealth Care ProvidersHigher EducationHospitals and Health Networks
    I
    ImmigrationInsurance CoverageIntellectual PropertyIntellectual Property Litigation, Arbitration, and Dispute ResolutionIntellectual Property Portfolio Strategy, Management & LicensingInternational BusinessInternet Law
    L
    Labor & EmploymentLiquor Law, Licensing, Manufacturing, and DistributionLitigation
    M
    Media Law & Creative Economy PracticeMergers & AcquisitionsMunicipal Law
    N
    Non-Profit Law
    P
    Patent Preparation and ProsecutionPharmaceutical / Medical Devices / Pharma ServicesProducts and Consumer Liability DefenseProfessional LiabilityPublic Utilities
    R
    Real Estate, Finance, and Land Use
    S
    SecuritiesSolar Energy
    T
    TaxationTelecommunicationsTrademark & Copyright Protection & Enforcement
    V
    Venture Tech & Emerging Growth Companies
    W
    White Collar Investigations & DefenseWorkers’ Compensation
    • New Jersey
    • New York
    • Pennsylvania
    • Blogs
    • Articles
    • Podcasts
    • COVID-19 Resources

    Categories

    Anti-Trust/Trade Regulations Banking/Financial Services Business Operations Choice of Entity Compliance Construction Corporate Finance/Securities Corporate Governance Corporate Transparency Act Economic Development Law Entity Formation Franchise Law General Liquor Law Mergers & Acquisitions Public Utilities Real Estate Tax Uncategorized
    Blogs > Biz Law Blog > What is the New Beneficial...
    Member
    Jeffrey K. Cassin
    Visit Profile

    What is the New Beneficial Ownership Information (BOI) Reporting and How Does it Affect Your Business?

    What is the New Beneficial Ownership Information (BOI) Reporting and How Does it Affect Your Business?

    Commencing Jan. 1, 2024, certain business owners and operators will have to comply with new information retention and reporting requirements for the direct and indirect ownership of privately held entities: the Beneficial Ownership Information (BOI) Reporting under the 2021 Corporate Transparency Act (CTA). Failure to do so may result in the imposition of civil penalties of $500 per day (up to $10,000) or criminal penalties of up to 2 years in prison.

    Overview of the Corporate Transparency Act of 2021

    In 2021, Congress enacted a new piece of legislation intended to deter money laundering, terrorism and other illegal activities, as discussed in our prior blog here. The law requires certain companies, known as reporting companies, to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), unless exempt from reporting under the CTA. The required information includes the beneficial owner’s name, date of birth, home address and passport or driving license number, including an image of the chosen document verifying such number. Under the law:

    “Reporting company” means either:

    (a) a corporation, limited liability company (LLC), limited liability partnership (LLP) or any other entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe; or

    (b) a foreign corporation, LLC, LLP or other entity that is registered to do business in any U.S. state or tribal jurisdiction.

    “Beneficial owner” is defined as any natural person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise:

    1. exercises substantial control over a reporting company;
    2. owns 25% or more of the equity interests of a reporting company; or
    3. receives substantial economic benefits from the assets of a reporting company.

    Exemptions

    The CTA provides a list of 23 exempted entities, including, but not limited to, broker-dealers, insurance companies, banks and tax-exempt organizations. Importantly, businesses that employ more than 20 employees on a full-time basis in the United States and demonstrate more than $5 million in gross receipts or sales are also exempt from the BOI Reporting.

    Filing Due Dates

    The deadline for filing the initial BOI reports varies depending on the company’s date of formation, incorporation or registration with the secretary of state or similar body under the laws of that state, as follows:

    • If the reporting company was formed, incorporated or registered before 1, 2024, the initial BOI report must be filed by Jan. 1, 2025.
    • If the reporting company was formed, incorporated or registered after 1, 2024, the initial BOI report will be due 30 days following confirmation of formation, incorporation or registration from the secretary of state or similar body.

    Thereafter, reporting companies must update their BOI reports or correct any inaccurate filing within 30 days after any change or discovery of any inaccuracies.

    Additional Considerations

    Business owners should consult with an experienced attorney and start evaluating whether their companies fall under the definition of a reporting company. If their companies are subject to the new BOI Reporting requirements, business owners may want to consider amending their governing documents (e.g., operating agreements for LLCs, shareholders’ agreements and by-laws for corporations) to outline these new reporting requirements and provide notice of these recent changes to their shareholders, members or partners, as applicable. Companies may also need to evaluate and implement changes to their internal policies to comply with these new requirements.

    Additionally, companies targeting one or more acquisitions in 2024 may also want to be proactive in their legal due diligence to assess whether their potential targets comply with the CTA. Acquirors may also need to craft appropriate escrows and special indemnity provisions in their purchase agreements to protect themselves against this known risk, as well as factor in the cost of updating internal policies to ensure compliance following the closing.

    Although FinCEN has not released the BOI report form and the new filing system has yet to be completed, FinCEN appears to remain committed to implementing this new reporting requirement beginning Jan. 1, 2024. Accordingly, companies and their legal representatives should start now to initiate discussions relating to the CTA to ensure prompt compliance in 2024, especially considering the severity of the potential penalties.

    The statements in this blog are informational in nature and currently accurate; their continued accuracy is expressly subject to there being no material change in the law. They are neither intended to be comprehensive in all respects, nor to serve as a substitute for professional advice. If this blog raises any questions, please feel free to contact the authors, Samuele Riva, Esq., at sriva@norris-law.com and Jeff Cassin, Esq., at jcassin@norris-law.com.

    Member
    Jeffrey K. Cassin
    Visit Profile

    Related Posts

    Selling Your Business? What to Do When Family Members Work There but Don’t Own a Piece Rising Construction Costs in 2025: Tariffs, GMP, and Fixed-Price Contracts The Personal Side of M&A: Helping Business Owners Turn Vision into Legacy

    Share

    Helpful links

    • About Us
    • News
    • Services
    • Blogs
    • Attorneys
    • Articles
    • (COVID-19)
    • Award Methodology
    • Events
    • Join our Team
    Connect
    Online Payment

    Connect with Us

    • LinkedIn
    • Facebook
    • Twitter
    • Instagram
    • Youtube

    Join our growing team

    We are looking for quality attorneys to help us do more for our clients. At Norris McLaughlin, each attorney has the same opportunity to succeed whether you’re at the beginning of a career or pinnacle of the profession.

    Learn More

    Subscribe to our content

    Receive timely legal information delivered to your inbox

    This field is for validation purposes and should be left unchanged.
    © , Norris McLaughlin, P.A., All Rights Reserved. Attorney Advertising.
    VIEW OUR DISCLAIMER,  TERMS OF USE,  AND PRIVACY POLICY

    We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume you consent to our cookie policy. Learn more