UPDATE: CORPORATE TRANSPARENCY ACT
You may recall that our office previously provided information and guidance on the Corporate Transparency Act, including our blog post found here. As a quick recap, the Act requires that corporations fill out a Beneficial Owner Information Report (or “BOIR”) on the federal government’s FinCEN website, which can be found here. A “beneficial owner” is someone who owns or controls at least 25% of the corporation, or exercises “substantial control” over the corporation. One of the definitions for “substantial control” under the Act involves someone who “directs, determines, or has substantial influence over important decisions” in the corporation. We believe that definition encompasses the Board, as they fall into that category as a collective – so to be on the safe side, we recommend that you register all Board members on the BOIR.
We are emailing to remind you that the deadline to file the BOIR is approaching near. Ordinarily, it would be December 31, 2024 for any corporation that predates January 1, 2024. However, the federal government has offered an extension due to the impact of this year’s hurricanes. If your community is found within one of the areas designated by FEMA as being eligible for relief, corporations formed before January 1, 2024 will now have until July 1, 2025 to fill out the report.
In September, we provided an update on a lawsuit filed by the Community Associations Institute (“CAI”) against the federal government. In short, CAI sought to enjoin the federal government from enforcing the Act as to community associations. As it presently stands, the federal court has denied CAI’s motion for a preliminary injunction. Because of this, we strongly encourage you to file the report as soon as possible. Keep in mind that failure to comply with the Act carries significant repercussions: namely, a civil fine of up to $500 per day (for a maximum fine of $10,000), and/or imprisonment of up to two years.
For a general overview of the Corporate Transparency Act, please view our earlier blog post.
Recent Articles:
- (Yet Another) Corporate Transparency Act Update – December 2024
- The Corporate Transparency Act – November 2024 Update
- Protecting Your Community Association After a Hurricane: Avoiding Fraud and Ensuring Proper Recovery
- General Guidance for Florida Community Associations Following a Major Storm
- The Corporate Transparency Act – September 2024 Update
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