The CTA, BOI and FinCEN: What Does this Mean for La Verne, CA Businesses?

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.

Read more for details on how this may impact your business in the future.

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 coffee shop in La Verne, CA 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. This can include decision-makers, managing partners, or co-owners with significant stakes. For example, in La Verne, the owner of a tattoo parlor who holds 40% of the shares and is actively involved in strategic 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 offers a streamlined approach to small business BOI reporting, providing businesses with accurate guidance to comply with FinCEN requirements.

Penalties for Non-Compliance:

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. FinCEN provides a 90-day safe harbor period for corrections without penalties.

No action is needed immediately, but if you decide to move forward, you can avoid hassles by filing with the quick and accurate assistance of ZenBusiness.

Additional Resources:

• Navigating Beneficial Ownership Reporting

• Details on Preliminary Injunction

• Beneficial Owner Definition

• CTA Deadlines for 2025

• Know Your State's Requirements for Beneficial Ownership Reporting

• BOI Compliance Guide for Small Entities

We want to hear from you!

Join us in making an 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.