1. What is the CTA?

The Corporate Transparency Act (CTA) is a federal law enacted in the United States that requires certain business entities to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). The purpose of the CTA is to combat illicit activities such as money laundering, terrorist financing, and other forms of financial crime by creating greater transparency around who owns and controls certain business entities.

2. What is Beneficial Ownership Information (BOI)?

Beneficial Ownership Information (BOI) refers to the specific data that must be reported about the individuals who have substantial control or ownership of a company. This information typically includes the beneficial owner's name, date of birth, residential address, and an identifying document number (e.g., from a driver’s license or passport). Additionally, an image of the identification document must also be submitted. The goal is to identify the true owners and controllers of business entities to prevent the use of shell companies for illegal activities.

3. Does My HOA need to file?

Many Homeowners Associations (HOAs) will meet the statutory definition of a Reporting Company under the CTA. However, there are certain exemptions based on factors like the size of the entity, revenue, and employee count. To determine if your HOA is required to file, it's essential to evaluate whether it meets the criteria set forth under the CTA or if it qualifies for an exemption. Check out the FinCEN Small Entity Compliance Guide. Should you have any questions that require a legal opinion or analysis, you should consult an attorney. 

4. What happens if we don’t report?

Failure to report Beneficial Ownership Information (BOI) as required by the CTA can result in severe penalties, including fines and potential criminal charges. The fines can reach up to $500 per day for non-compliance, and criminal penalties may include imprisonment for up to two years. It is crucial to meet the reporting deadlines and ensure that the information provided is accurate and complete.

5. How Often?

The initial report must be filed by January 1, 2025, for entities created before January 1, 2024. After the initial filing, any changes to the beneficial ownership information must be reported within 30 days of the change. This includes changes in ownership, control, or any other updates to the information initially provided.

6. Who has access to my personal information?

Access to Beneficial Ownership Information (BOI) is strictly controlled and limited to authorized government authorities, such as law enforcement agencies and regulators. The information is not publicly available, and FinCEN has implemented safeguards to ensure that it is only used for legitimate purposes, such as investigating financial crimes.

7. Do we have to use a Third-Party to submit our BOI filing?

No, you do not have to use a third-party service to submit your Beneficial Ownership Information (BOI) filing. You can submit the report directly through the official FinCEN website at no cost. However, a third-party service provider may be of assistance with the filing process, particularly for entities with multiple beneficial owners and regular turnover. Should you have any questions that require a legal opinion or analysis, you should consult an attorney.