Lisa and the Law

Another Example of Why All New Businesses Must File a BOIR – No Exceptions

All new reporting companies formed after January 1, 2024, will have to file an initial Beneficial Ownership Information Report (BOIR) within 30 CALENDAR days of their formation. No business will meet the requirements of any of the 23 exemptions provided by the CTA at the time the business is created. Once the reporting company obtains its exemption status, it can update its BOIR and indicate that it is newly exempt. For example, a non-profit organization is not exempt under 501(c) until such time as the IRS issues a letter granting tax-exempt status. Until the time the wannabe nonprofit gets its official letter, the corporation is not a tax-exempt entity pursuant to the CTA and must comply with its reporting requirements.

For example, businesses that are exempt under the “large operating company” exemption must have: 20 full-time W-2 employees; a physical location in the U.S.; and FILED a tax return indicating that it had $5 million or more in gross receipts or income. No new business formed will have filed any tax return at the time of its formation so it will have to file at least file an initial BOIR and keep it updated until such time as the business is eligible to be exempt under the “large operating company” exemption.

Related Services: CTA Compliance