Year-End Corporate Transparency Act Reporting Requirements for a Small Business

Michele Ungvarsky
Estate Planning

Written By:

Michele Ungvarsky

Michele has an intimate knowledge of how a severe illness with no planning can decimate an estate. Her father developed early dementia, and her parents moved in with her. As her father’s condition worsened, she experienced firsthand the struggle and watched as the medical costs stripped her parent’s retirement accounts. Like many families, they had no idea where to turn, and they fumbled their way through the system. That is the reason she is so passionate about “Planning it Forward.” She wants to make sure other families have plans in place and receive help when a crisis does strike. In the words of Sugar Ray Leonard – “Success is attaining your dream while helping others to benefit from that dream materializing.”

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Small businesses nationwide must comply with the Corporate Transparency Act’s reporting requirements by January 1, 2025, to avoid steep penalties.

As the year ends, small business owners in Las Cruces and across the nation face an important legal requirement under the Corporate Transparency Act (CTA). Effective January 2024, this law mandates that businesses report details about their beneficial owners to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). Failure to comply with the CTA could result in fines up to $10,000 or imprisonment for up to two years.

For Las Cruces business owners, understanding this new requirement is critical. Whether you’re running a family LLC, a small corporation, or a partnership, here’s what you need to know to ensure compliance and avoid costly penalties.

What Is the Corporate Transparency Act?

The Corporate Transparency Act was created to combat financial crimes like money laundering and tax fraud. It requires many small businesses to disclose who owns and controls the company, helping prevent criminals from using anonymous shell companies to hide illicit activities.

The law applies to most small businesses operating in the U.S. by requiring them to file a Beneficial Ownership Information (BOI) report. This report identifies:

Individuals who own or control at least 25% of the business.
Anyone significantly involved in the business’s decision-making processes.

Also Read: What Is Probate?

Does the Corporate Transparency Act Apply to Your Las Cruces Business?

According to the U.S. Chamber of Commerce, not every business must submit a BOI report under the CTA. Certain larger companies are exempt, including those with:

More than 20 full-time employees.
Over $5 million in annual revenue.
A physical office in the U.S.

Other exemptions include banks, nonprofits, and certain publicly traded companies. However, most small businesses in Las Cruces, including LLCs, partnerships, and smaller corporations, likely fall under this law’s requirements.

If your business was formed before January 1, 2024, you have until January 1, 2025, to file your initial report.
For businesses formed after January 1, 2024, the report must be submitted within 30 to 90 days of formation.

What Information Do You Need to Include?

The BOI report must contain detailed information about both the business and its beneficial owners. Be prepared to submit the following:

Business Information:

Full legal name and any trade names.
Principal U.S. business address.
Taxpayer Identification Number (TIN).

Beneficial Owner Information:

Full legal name.
Residential address.
Date of birth.
Identification number from a government-issued ID (such as a passport or driver’s license).

For newer companies, details about the individuals who helped form the company (known as “company applicants”) may also be required.

Also Read: Is Succession Planning Necessary for Family Business Entities?

What Are the Penalties for Noncompliance?

Failing to file a BOI report by the deadline—or submitting incorrect or incomplete information—can result in serious consequences, including:

Fines of up to $10,000.
Up to two years of imprisonment.
Additional penalties if changes to the report (like new ownership) are not updated within 30 days.

Also Read: What are Penalties When Contributing to or Withdrawing From Retirement Accounts?

How Can Las Cruces Business Owners Prepare?

Here are some steps you can take to ensure compliance with the CTA and protect your business:

Determine Your Business’s Status: Confirm whether your business is subject to the CTA. Many small businesses in Las Cruces will need to file a BOI report.
Gather the Required Information: Identify all beneficial owners and collect their required details.
File on Time: Submit your BOI report by the appropriate deadline to avoid penalties.
Stay Updated: Keep track of changes in ownership or company structure, and report updates to FinCEN within 30 days.

Also Read: The Importance of Reviewing and Updating Beneficiary Designations for Estate Planning in Las Cruces

Let E-Law Help Your Business Stay Compliant

Running a small business is challenging enough without worrying about compliance risks. At E-Law, we’re here to help you stay ahead of legal requirements so you can focus on what you do best—growing your business.

If you’re unsure about how the Corporate Transparency Act applies to your business or need assistance filing your BOI report, request a discovery call today. Together, we’ll create a strategy to ensure compliance and protect your business from unnecessary penalties.

Key Takeaways

Understand the Law: The Corporate Transparency Act requires many Las Cruces small businesses to file Beneficial Ownership Information reports.
Meet the Deadline: Businesses formed before January 1, 2024, must file by January 1, 2025. Businesses formed after this date must file within 30 to 90 days.
Prepare Properly: Gather the necessary information about your business and its beneficial owners to avoid penalties.
Consult a Las Cruces Estate Planning Attorney: Partnering with an experienced estate planning attorney ensures accurate filings and peace of mind.