By Stephen Smoot
Four years ago, the United States Congress passed the Corporate Transparency Act to compel
certain types of businesses to self-report on their information.
West Virginia Secretary of State Mac Warner has worked for months to make sure that Mountain State businesses do not run afoul of these requirements.
According to the West Virginia Secretary of State’s website, the federal government claims that it needed additional powers to require that small businesses provide certain information. Federal
law enforcement and other agencies will use CTA mandated information to “prevent and identify
financial crimes, such as money laundering, tax fraud, and sanctions evasion.”
Businesses classified as “small and medium sized” by the federal government must provide this
information – this covers approximately 32.6 million business establishments in the United
States. Companies that existed prior to January 1, 2024 have until January 1, 2025 to file their
first report. New companies formed between January 1, 2024 and December 31, 2024 have 90
days after registration to file.
After January 1, 2025, new businesses will have to file their BOI within 30 days of registering a
business with the state Secretary of State’s office.
The federal government has assigned extremely harsh penalties for non-compliance, including
fines of up to $500 per day up to $10,000 total.
American companies with the obligation to report include corporations, limited liability
companies (LLCs), and any other company created from the filing of a document with the state’s
Secretary of State office. All foreign-owned companies formed under the laws of a foreign government and registered to do business in any state in the US must also register.
The registration takes place on an online portal operated by the US Financial Crimes
Enforcement Network. Information shared does not become public knowledge but can be shared with law enforcement.
The federal government under this act seeks Business Ownership Information about “the
individuals who ultimately own or control a business entity,” according to a United States Small
Business Administration document.
A “beneficial owner” has “substantial control” or “directly or indirectly owns 25 percent of
ownership interests.” The SBA gives examples, such as “husband and wife owners of a general
store operated through an LLC,” Chief Operations Officer of a small company operated through
a corporation, or chairman of the board of a foreign owned company with US sales and support
operations.
The federal government also has listed 23 exemptions from reporting requirements, listed on the federal website at fincen.gov/boi
The West Virginia Secretary of State’s office, anticipating that some may have difficulties with
the federal mandates, has put together multiple ways to get help from their office.
First, the West Virginia Secretary of State’s virtual assistant, S.O.L.O., can answer basic
questions on its website 24 hours a day, seven days a week. It is located on the bottom right
corner of the WVSOS webpage. The WVSOS webpage also has a five minute video tutorial on
how to register and fulfill the federal obligation.
During regular business hours, questions can be asked of office staff. Call (304) 558-8000 to get
questions answered.
