The Corporate Transparency Act (CTA) is a federal law that requires certain businesses to disclose information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). The CTA was enacted in 2021 as part of the National Defense Authorization Act with the purpose of preventing and combatting financial crimes.
The CTA requires certain business entities to file a Beneficial Ownership Information (BOI) report with FinCEN. You can learn more about the BOI reporting requirements here.
Much effort has been made to change the CTA to provide an exemption for community associations from the BOI reporting requirements, however, nothing has changed. Most homeowners associations and condominium owners associations will be required to file a BOI report by January 1, 2025. The exceptions to the reporting requirement are associations that 1) are actively held as a 501(C)(4) organization with an IRS exemption or 2) are operating within the United States, have an annual revenue of $5,000,000.00 or more, and have 20 or more employees. Most community associations will not meet the requirements of these exemptions.
The information that will be required for the community association is: 1) legal name, 2) any other identifiers such as “doing business as” or “trading as,” 3) current street address of principal place of business, 4) jurisdiction of formation or registration, and 5) tax payer identification number.
The information that must be provided by the Board Members is: 1) Individual’s name, 2) date of birth, 3) residential address, and 4) identifying number, such as a license or passport, and the state which issued the identification. Beneficial owners must also provide an image of the identification.
Any reporting company and/or beneficial owner who willfully violates this requirement may face civil penalties of fines up to $500 per day that the violation continues and criminal penalties of up to 2 years imprisonment and up to $10,000 in fines. Penalties may be issued for willfully failing to file, filing false information, or failing to correct or update a previously filed report.
Here are some helpful links:
If you have questions regarding the BOI reporting requirements and/or the CTA, or your association needs help filing the report, please contact us at (513) 643-3554 or info@richterlaw.us
