The CTA, BOI and FinCEN: What Does this Mean for Orange, 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 Orange, 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. For instance, in Orange, a tattoo parlor’s co-owner who holds a 40% stake in the business and is responsible for major operational decisions qualifies as 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 guidance and tools to streamline the BOI reporting process, ensuring businesses comply accurately 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 swift and accurate assistance of ZenBusiness. 

Additional Resources:

• Beneficial Ownership Report Guide for SBOs

• FinCEN BOI Filing Services from ZenBusiness

• FinCen Definition

• CA State Requirements for Beneficial Ownership Reporting

• Which CA Companies Are Exempt from the Corporate Transparency Act?

• A Guide to BOI Compliance in California

• Details on Preliminary Injunction

• Use this to Fill Out the Beneficial Ownership Information Form in CA

We want to hear from you!

Join us in making an impact! Fill out our BOI survey by December 18, 2024, and for every 25 responses, our Chamber will receive a $100 donation. Click here to participate! Your input is invaluable!

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.