💲 All New Jersey businesses must now file new disclosures with the federal government

💲 Failure to do so could result in fines up to $10,000

💲 The filing must be made regardless of the size of the business

As New Jersey businesses are preparing for tax filing season, nearly every business in the Garden State is now required to file a new disclosure with the federal government or face fines of up to $10,000.

The filing must be made regardless of the size of business or profitability.

There are few exemptions to the Corporate Transparency Act (CTA) that require most domestic and foreign companies to report their beneficial ownership to the Financial Crimes Enforcement Network (“FinCEN”).

The intent of the CTA is to prevent shell corporations and other entities from providing funding to terrorist organizations or other criminal enterprises.

Reporting is required for LLCs, corporations or other entities formed by the New Jersey Secretary of State. The size of a business does not matter even if it is sole proprietorship.

Fines for not filing the disclosure by the deadline are $500 per day up to $10,000.

The following information is from the Financial Crimes Enforcement Network (FinCEN), which is a division of the United States Treasury:

What is beneficial ownership information?

Beneficial ownership information refers to identifying information about the individuals who directly or indirectly own or control a company.

Why do companies have to report beneficial ownership information to the U.S. Department of the Treasury?

In 2021, Congress passed the Corporate Transparency Act on a bipartisan basis. This law creates a new beneficial ownership information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.

What companies will be required to report beneficial ownership information to FinCEN?

Companies required to report are called reporting companies.

There are two types of reporting companies:

☑ Domestic reporting companies are corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.

☑ Foreign reporting companies are entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office.

Are there exemptions to the reporting requirement?

Yes.

There are 23 types of entities that are exempt from the reporting requirements.

Carefully review the qualifying criteria before concluding that your company is exempt.

(A list of exemptions can be found at the end of this article)

When do I need to report my company’s beneficial ownership information to FinCEN?

A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial beneficial ownership information report.

A reporting company created or registered on or after January 1, 2024, and before January 1, 2025, will have 90 calendar days after receiving notice of the company’s creation or registration to file its initial BOI report. This 90-calendar day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.

Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports with FinCEN.

Is there be a fee for submitting a beneficial ownership information report to FinCEN?

No.

There is no fee for submitting your beneficial ownership information report to FinCEN.

How will I report my company’s beneficial ownership information?

If you are required to report your company’s beneficial ownership information to FinCEN, you will do so electronically through a secure filing system available via FinCEN’s BOI E-Filing website.

Access the form by going to FinCEN’s BOI E-Filing website and select “File BOIR.”

Note: If you use a financial advisor, lawyer or CPA to prepare and file the form, they may charge you a fee.

Is a reporting company required to use an attorney or a certified public accountant (CPA) to submit beneficial ownership information to FinCEN?

No.

FinCEN expects that many, if not most, reporting companies will be able to submit their beneficial ownership information to FinCEN on their own using the guidance FinCEN has issued.

Reporting companies that need help meeting their reporting obligations can consult with professional service providers such as lawyers or accountants.

What are the exemptions from this reporting requirement?

FinCEN lists a total of 23 exemptions. They are:

1 Securities reporting issuer
2 Governmental authority
3 Bank
4 Credit union
5 Depository institution holding company
6 Money services business
7 Broker or dealer in securities
8 Securities exchange or clearing agency
9 Other Exchange Act registered entity
10 Investment company or investment adviser
11 Venture capital fund adviser
12 Insurance company
13 State-licensed insurance producer
14 Commodity Exchange Act registered entity
15 Accounting firm
16 Public utility
17 Financial market utility
18 Pooled investment vehicle
19 Tax-exempt entity
20 Entity assisting a tax-exempt entity
21 Large operating company
22 Subsidiary of certain exempt entities
23 Inactive entity

READ MORE: For more detailed information of filing requirements and who must file a report, follow this link.

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