How the US Corporate Transparency Act Reporting Requirements Will Affect Authors

UPDATED: October 2, 2024

As part of the updates to the 2021 Corporate Transparency Act goes into effect on January 1, the Financial Crimes Enforcement Network (FinCEN) has been sending out notifications about the reporting requirements.

Under the CTA, registered businesses (including LLCs) in the US are now required to complete a Beneficial Ownership Information report and file it with FinCEN.

This is part of a nationwide effort to crack down on corruption and money laundering activities. 

These new reporting requirements will affect authors in the US who have registered as a Corporation (S or C), partnership (limited or otherwise), or an LLC (single member or otherwise).

FinCEN created an extremely comprehensive Small Entity Compliance Guide, to help us be able to comply, and you can find that and more on their website: https://www.fincen.gov/boi

But here are some of the main points:

1. Businesses formed and operating PRIOR to January 1, 2024 will have until January 1, 2025 to file their BOI. 
2. Businesses formed after January 1, 2024 will have 90 days to file their BOI.
3. The information collected is stored in the FinCEN database for Corporate Transparency Act compliance.

But, let's break down some of the more complex terminology.

Wait a second...  Jessica, what earthly authority do you have to even be talking about this? You write fantasy books for crying out loud! 

Only in my free time! At my day job, I work as a legal and regulatory compliance analyst, and that's actually how I became aware of these requirements being rolled out January 1st.

I may not have a fancy law degree, but I know how to do legal and regulatory research, and more, I know my way around the US Dept. of Treasury's website to find where all the good resources and info are hiding.

At a bare minimum, I am more than qualified to summarize these regulations and reporting requirements (otherwise I'd have been fired long, long ago). 

That said - Nothing in this blog post is intended as or should be taken as legal advice. This is, at best, business advice and a summary.

Now, where were we?

What is a Beneficial Owner?

A beneficial owner is any individual who, directly or indirectly:

• Exercises substantial control over a reporting company; or
• Owns or controls at least 25 percent of the ownership interests of a reporting company.

If the person who registered the business (i.e. filed the paperwork with your Secretary of State, or county clerk or whatever) is different from the ultimate beneficial owner, information will have to be provided on the person who registered the business as well.

What Information is Required from the Reporting Company?

At the time of filing, you will be asked for the following information:

1. Full legal name of the business
2. Any trade names or DBAs (doing business as)
3. Taxpayer ID (EIN, SSN/TIN, etc.)
4. Complete and current US address (primary location in the US where the company conducts business; also called the principal address)
5. State registration documentation

What Information is Required from Each Beneficial Owner?

1. Full legal name
2. Date of Birth
3. Complete and current address (individual’s residential street address)
4. Unique ID number and jurisdiction AND an image of one of the following non-expired documents: US passport, state drivers license, other identification document issued by a state, local, or tribal government

If you do not want your information to be displayed in FinCEN’s privately held database, you can request a FinCEN identification number instead. It’s a unique identifying number that is provided upon request that FinCEN will issue to an individual or reporting company and can be used in place of certain information on the BOI report.

Um, in English please? 

Before you file your BOI report (or while you're filing it for the first time), choose the option to create a FinCEN identification number.

You will be asked to provide the Beneficial Ownership information listed above. Once they verify your information, they will provide your FinCEN ID number.

From there, you will then include the FinCEN ID number on the BOI report in the place of the Beneficial Owner info it asks for in the report filing.

What If I Just...Don't?

Failure to file your BOI can lead to criminal penalties of imprisonment for up to two years and/or a fine of up to $10,000, and a civil penalty of $500 per day you're in violation. 

10/10 would not recommend avoiding. It's very easy to do, takes about 10 minutes if you have all your documents together.

Do I Need to Do This Annually?

As of right now, the guidance says you do not need to refile your BOI on a regular basis.

Refiling would only be if there are errors or changes from your original report. If anything changes from the time you filed your initial report, you must file an amended report within 30 days after the change. Changes include:

1. Change to any information for the reporting company (like a new DBA)
2. Additions/removals of beneficial owners
3. Change to existing beneficial owners information (name, address, etc.)

So What Do I Need to do RIGHT NOW?

File your report!!

The end of the year is sneaking up on us, and so is the deadline. If you have an LLC in the US, you are very likely NOT exempt from this and need to fill out the form.

It doesn't take a lot of time, and they have a bunch of resources to walk you through. 

Note: If you formed your LLC through a provider like Legal Zoom, you have the option to pay them $150 to do it for you... or you can do it for free yourself in 10 minutes. 

I Have A Lot More Questions

FinCEN has stated they understand this may potentially be a burden on small businesses, like us, and they've taken steps to ensure that the process is as simple as possible.

If you have more questions, check out the Small Entity Compliance Guide they put together. It is super detailed and helpful. 

The big question I've been seeing is: Will just any rando from the street be able to see this information once I file it??

The Dept of the Treasury has an extensive FAQ that I encourage you to review, but in short, anyone who wants to access your BOI will need to present a compelling reason through various applicable government agencies, and receive your permission. 

The full answer you're looking for, straight from the source (I submitted a contact question):

FinCEN will protect beneficial ownership information. 

FinCEN will permit Federal, State, local, and Tribal officials, as well as certain foreign officials who submit a request through a U.S. Federal government agency, to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement.

Financial institutions will also have access to beneficial ownership information in certain circumstances, with the consent of the reporting company. Those financial institutions’ regulators will also have access to beneficial ownership information when they supervise the financial institutions.

FinCEN is developing the rules that will govern access to and handling of beneficial ownership information. Beneficial ownership information reported to FinCEN will be stored in a secure, non-public database using rigorous information security methods and controls typically used in the Federal government to protect non-classified yet sensitive information systems at the highest security level.

FinCEN will work closely with those authorized to access beneficial ownership information to ensure that they understand their roles and responsibilities to ensure that the reported information is used only for authorized purposes and handled in a way that protects its security and confidentiality.

I know that will still not be enough information for some, and in that case, I encourage you to contact FinCEN with further questions.

Hope this helps!