By now, many of you have become aware of newly enacted Federal Beneficial Ownership Reporting that passed as a part of the Corporate Transparency Act. For many Minnesota entities, the Minnesota Secretary of State sent out a notice stating that the filing is free and you should be wary of third parties filing for a fee. Although the filing is free (as with any tax filing), not all entities are required to file and there are some uncertainties about the new filing requirement.

The deadline to file, for companies that existed before 12/31/2023, is December 31, 2024. Entities created or registered during 2024 have 90 calendar days to file their initial report. For existing entities, there is still a lot of time to file, and there are no advantages to filing early. Waiting to file might bring additional clarity to the rules and the process. We plan to provide assistance with the filing shortly after the April 15th, 2024 tax deadline. If you want to file before that you can complete the report yourself or consult a lawyer to help you complete the filing.

Even though we can’t assist you immediately, we have some general information you should consider before you start the filing:

• You need to evaluate your reporting obligations for every entity you have. This can include entities that are wholly owned by other entities and entities that you might think are inactive. You might not have to file.
• A beneficial owner can include more than the direct owners of the entity and might include individuals who have no ownership in the entity. You will need to collect specific information from each beneficial owner before you can complete the filing.
• A person who willfully violates the BOI reporting requirements my be subject to civil penalties of up to $500 penalty per day filing Other penalties include criminal penalties of up to two years in prison and/or criminal penalties of up to $10,000.

Before you attempt to file the form, you should familiarize yourself with the rules and instructions and consider some initial information. FinCEN has issues a Small Entity compliance guide to walk you through the rules and process. You can access the guide using this link: https://www.fincen.gov/boi/small-entity-compliance-guide.

The guide walks you through these 6 key questions that need to be answered:

1. Does my company have to report it beneficial owners?
2. Who is a beneficial owner of my company?
3. Does my company have to report its company applicants?
4. What specific information does my company need to report?
5. When and how should my company file its initial reports?
6. What if there are changes to or inaccuracies in the reported information?

If you have any questions in the meantime, please reach out to your designated advisor.