Little Health Law Blog
Our healthcare and business law firm works with medical practices to ensure compliance with state and federal laws, rules, and regulations. The Corporate Transparency Act (“CTA”) aims to combat illicit activity including tax fraud and money laundering. The reporting rule under the CTA requires certain entities to file beneficiary ownership information (“BOI”) reports. This blog post provides an overview of the reporting requirements. If you need assistance understanding how the reporting rule applies to your business or would like to discuss this blog post, you may contact our healthcare and business law firm at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@littlehealthlaw.com. You may also learn more about our law firm by visiting www.littlehealthlaw.com.
The Report
The report must contain information about the entity and two categories of individuals: beneficial owners and company applicants. A beneficial owner is any individual who, directly or indirectly, exercises substantial control over a reporting company and anyone who owns or controls at least 25 percent of the ownership interests of a reporting company. Ownership includes equity, stock, voting rights, capital or profit interests, and convertible interests. As to company applicants, there are two categories. The first category of company applicants includes any person who filed the document that created the company with the secretary of state. The second category of company applicants includes any person who directed or controlled the filing action but did not file the company creation documents.
Reporting Companies
There are two categories of reporting companies:
- A domestic reporting company, which includes an LLC, corporation, or an entity created by filing a document with a Secretary of State or any similar office.
- A foreign reporting company.
There is a long list of entities that are exempt from reporting, which includes banks, securities exchange or clearing agencies, insurance companies, venture capital fund advisers, accounting firms, tax-exempt entities, and large operating companies. Large operating companies are exempt only if they satisfy all the following requirements:
- More than 20 full-time employees in the U.S.;
- A physical operating presence in the U.S.; and
- A filed federal income tax or return for the previous year demonstrating more than $5,00,000 in gross receipts or sales.
Submitting the Report
The reporting entity must submit the report to the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). An entity can file electronically through a secure filing system available via FinCEN’s BOI E-Filing website.
For companies in existence before January 1, 2024, it must file its initial beneficial ownership information report by January 1, 2025. Reporting companies registered after January 1, 2024, and before January 1, 2025, have 90 calendar days after receiving public notice of registration (March 8, 2024) to file their initial BOI reports.
For companies created or registered on or after January 1, 2024, and before January 1, 2025, then it must file its initial beneficial ownership information report within 90 calendar days after receiving actual or public notice that its creation or registration is effective. Specifically, this 90-calendar day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.
If you need assistance understanding how the reporting rule applies to your business or would like to discuss this blog post, you may contact our healthcare and business law firm at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@littlehealthlaw.com. You may also learn more about our law firm by visiting www.littlehealthlaw.com.