Deadline looms for millions of businesses subject to Corporate Transparency Act filing
Just weeks before a year-end reporting deadline, a majority of survey respondents indicated they are either waiting until closer to year’s end (37%) or are not sure of the need to file their beneficial ownership information (BOI) reports (32%), according to a Nov. 12 webinar poll of 4,427 U.S. businesses conducted by Wolters Kluwer CT Corporation. Another 12% cited “insufficient resources” for not having yet filed and 9% believe that the BOI requirements “don’t apply to my business.”
The results reveal a strong sense of uncertainty and procrastination only a month before the mandatory January 1, 2025 Corporate Transparency Act (CTA) filing deadline that impacts millions of businesses.
Passed by Congress in 2021 to help combat fraud, the CTA requires many U.S. entities and foreign entities registered to do business in the U.S. to file a BOI report with the federal government. The Financial Crimes Enforcement Network (FinCEN) estimates that 32.6 million entities must file by January 1, 2025, but many businesses are not prepared due to unfamiliarity with the requirement or misconceptions about CTA reporting criteria.
“When it comes to Corporate Transparency Act compliance, it is critical for businesses to understand their filing status and to act promptly to submit the required information on time,” says Rupak Venugopal, Vice President, Beneficial Ownership, Wolters Kluwer Financial & Corporate Compliance. “Procrastination is not a viable strategy, as non-compliance could result in civil penalties of up to $591 per day and criminal penalties of up to $10,000.”
When asked how prepared their organizations were for complying with the Corporate Transparency Act reporting obligation, 54% confirmed their organizations were in various stages of preparedness, while 32% acknowledged their organizations were “not at all prepared.”
As of mid-November, nearly 8.5 million of the estimated 32.6 million entities that are subject to filing have submitted their BOI reports with FinCEN. For more information on navigating the BOI reporting requirements, an on-demand webinar, Preparing for the Corporate Transparency Act deadline, is available through the end of this year. Additional insights on BOI compliance are available at Corporate Transparency Act Resources from CT Corporation Wolters Kluwer.
