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Corporate Transparency Act – Reporting Requirements for Certain Businesses in 2024

Published in VGM Government Relations on January 23, 2024

Certain U.S. business types, including corporations and LLCs, are now required to submit reports regarding their ownership. Failure to submit these reports can result in both financial penalties and/or prison time. While this new reporting requirement is not specific to the DMEPOS industry, we know that several of our members’ companies will be subject to these new reporting requirements due to size and corporate structure, and we want to make sure those companies are aware of these new requirements and can take the necessary steps to avoid the monetary and criminal penalties associated with non-compliance.

The Corporate Transparency Act, enacted in 2021, held provisions that require certain business types to begin submitting reports in 2024 regarding the people who own, or directly/indirectly, control their business. These reports are called BOI (Beneficial Ownership Information) reports and will be submitted to an entity called FinCEN (Financial Crimes Enforcement Network). The reporting requirements begin in 2024 for some companies and 2025 for others. Failure to submit these reports if you are required to do so, or submitting false information within the reports, can result in 1) fines of up to $10,000 or a fine of $500 per day for each day of non-compliance, and 2) criminal penalties of up to two years in prison.

WHO IS REQUIRED TO REPORT?

U.S.-based corporations, limited liability companies (LLCs), and any other entities created by the filing of a document with a secretary of state or any similar office in the United States are required to submit BOI reports to FinCEN. There are, however, currently 23 specific exceptions regarding who has to submit reports, and those exceptions are outlined in section 1.2 of FinCEN’s published compliance guide found here. For example, one of the exemptions is for companies that have 20 U.S.-based employees and gross receipts totaling more than $5 million.

There will be no cost to businesses to submit these reports. They can be submitted electronically on FinCEN’s website.

WHEN ARE REPORTS REQUIRED TO BE SUBMITTED?

If your business is subject to the reporting requirements, the date your first report is due depends on when your company was created and registered to conduct business:

  • If your business was created or registered before Jan. 1, 2024, the deadline to submit your first report is Jan. 1, 2025.
  • If your business was created during calendar year 2024, you will have 90 days from whichever of the two dates comes first:
    • The date your company receives actual notice that its creation/registration is effective.
    • The date on which the Secretary of State, or similar office, first provides public notice of when the company was created or registered.
  • If your business was created after Jan. 1, 2025, you will have 30 days from whichever of the two dates comes first:
    • The date your company receives actual notice that its creation/registration is effective.
    • The date on which the Secretary of State, or similar office, first provides public notice of when the company was created or registered.

Below are some helpful resources to help you better understand these new requirements and whether your business is subject to them.

While this is not a DME industry-specific requirement, we know it will impact some of our members, and we want to make sure anyone who is subject to these requirements is aware of them and compliant with them. If you have any questions, please reach out to the VGM Government Payer Relations Experts at 800-642-6065.

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