2024 September InMaricopa Magazine

BUSINESS

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Own a business or LLC? Then you need to know this! BY CHRIS J. SCOGGIN, CPA

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HE CORPORATE TRANSPARENCY ACT was signed into law in 2021, but the major provision of this legislation did not take effect until this year. This provision requires every business with 20 or fewer employees and no more than $5 million in annual revenue to report certain information about the business and its owners. This requirement includes any LLC or partnership that may be used as a rental real estate holding company or may be dormant. What needs to be reported? Owners claiming 25% or more of a company need to be reported on the Beneficial Ownership Information report. Regardless of whether a principal owns a company directly or indirectly, if their ownership represents 25% or more, they must be listed on the BOI report. People who exercise “substantial control” over the company also need to be listed. These people do not need to have any ownership in the company but are decision-makers. This generally comprises officers and directors but can also include senior management if they can make decisions that affect the company’s running. What is a beneficial owner? A beneficial owner is an individual who, whether directly or indirectly, exerts substantial authority over the reporting company, or holds or governs an ownership If the individual fits into any specified categories, they are deemed exercising substantial control. These categories include being a senior officer, such as the president, chief financial officer, general counsel, chief executive officer, chief operating officer or any comparable role. Also, if the individual has the power to appoint or dismiss officers or most directors of the reporting company, they are considered to exert substantial control. Furthermore, if the individual serves as a pivotal decision-maker for the reporting company, they are considered to have substantial control. stake of at least 25% of the company. What is substantial control?

When does this information need to be reported?

How to report You can go to FinCEN.gov/BOI to begin the reporting process. If you would like professional assistance to meet these onerous reporting requirements, you can call CS CPA Group at 520-568-3303 or email us at Info@CSCPAGroup.com. We would be happy to ensure your business or LLC complies with this new law.

Reporting deadlines are determined by when your company was formed. Companies created after Jan. 1, 2024, must complete their initial report within 90 days of their creation. Companies created before that date must complete their initial report by Dec. 31, 2024. When does a BOI report need to be updated? BOI reports need to be updated on two different occasions. A change of information. Any infor- mation submitted in a previous form must be changed if it is no longer correct. This includes information about the declared beneficial owners as well as all the information given about them, such as names, addresses and ID numbers. If an error occurs in the information. We all know sometimes mistakes are made. If there is a typo or incorrect information, then a new report needs to be submitted. In both cases, the new report must be submitted within 30 days.

520-568-3303 CSCPAGroup.com