Under the Corporate Transparency Act (CTA), many small business owners in the United States are required to file beneficial ownership information reports (BOIR) by January 1, 2025. Failure to submit the new paperwork by the deadline puts small business owners at risk of criminal penalties, imprisonment, and fines up to $10,000.

The CTA was enacted in 2021 to help prevent and combat money laundering, terrorist financing, corruption, and tax fraud. Under the CTA, which went into effect on January 1 of this year, businesses must provide their legal name and trademarks, as well as their current U.S. address. They’ll also need to provide a taxpayer identification number and specify the jurisdiction where they were formed or registered.

All businesses that fall under the definition of a reporting company must file a BOIR by January 1, 2025. Reporting companies are those that fall under the following requirements:

• Are for-profit, privately held companies registered to conduct business in the U.S.
• Have 20 or fewer employees or have $5 million or less in gross sales or receipts.

Most applicable businesses must file by January 1, 2025, with two exceptions.

• New companies created between Jan. 1, 2024 and Jan. 1, 2025 need to file within 90 days of formation.
• Companies formed after Jan. 1, 2025 will need to file within 30 days of formation.

There are 23 exemptions for small businesses that will not have to file a BOIR. Find out if your business is exempt here. Publicly traded companies and non-profits do not fall under the CTA, as they are subject to their own reporting requirements.

If this act applies to you, file your report with the Financial Crimes Enforcement Network (FinCEN) here. There are organizations challenging the legitimacy of this act in court, but until a verdict is reached, the deadline applies.

For more information, view the Small Business Administration’s guide for complying with the CTA or their blog post on what every small business should know about the CTA.