The CTA, BOI and FinCEN: Insights for SBOs in Charleston, SC

The Corporate Transparency Act may require certain U.S. companies to disclose beneficial ownership information to FinCEN to combat financial crimes.

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.

However, filing your Beneficial Ownership Information (BOI) report will help you avoid fines if this injunction is overruled. Waiting could mean scrambling to meet compliance requirements or penalties. ZenBusiness offers help via simple and streamlined BOI compliance tools for SBOs that want to cover their obligations easily in advance.

1. Determine if Your Business Must File.

A ‘reporting company’ is any small business, corporation, or LLC that is registered with the state, unless exempt. Exemptions apply to publicly traded companies, banks, and charities. For example, a local bakery in Charleston, SC would likely need to file a BOI report.

2. Identify Your Beneficial Owners.

A ‘beneficial owner’ is someone who either has substantial control over a company or owns at least 25% of it. For example, in a pet grooming salon in Charleston, the owner who holds a 40% stake in the business and makes pivotal staffing and operational decisions would be considered a beneficial owner.

3. Gather the Required Information.

Prepare:

• Business name, address, and EIN.

• Beneficial owners’ names, addresses, DOBs, and ID details.

4. File Your BOI Report.

Deadlines:

• Existing businesses: File by 01/01/2025.

• New companies (2024): File within 90 days of formation.

• New companies (2025+): File within 30 days of formation.

ZenBusiness helps SBOs safeguard against penalties by meeting guidelines now using expertise, helpful tools and specialized processes.

Additional Resources:

• Details on Preliminary Injunction

• FinCEN BOI Filing ServicesFinCen Definition

• Who’s Exempt from the Corporate Transparency Act?

• FinCEN’s Compliance Guidelines

• FinCEN BOI FAQ

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Join us in making a positive impact! Complete our BOI survey by December 18, 2024, and for every 25 responses, our Chamber will receive a $100 donation. Take the survey here! Your participation is greatly appreciated!

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.