My Digital Farmer Podcast – Episode 287: The Corporate Transparency Act Deadline: What Every Farmer Should Know

Release Date: November 13, 2024
Host: Corinna Bench
Guest: Richard Chamberlain, Founder and Managing Attorney of Legacy Law Group

Introduction

In Episode 287 of the My Digital Farmer Podcast, host Corinna Bench addresses a crucial regulatory update affecting farm businesses across the United States—the Corporate Transparency Act (CTA). Recognizing the significance of this legislation and its potential impact on farmers, Corinna invites Richard Chamberlain, an experienced estate planning attorney, to demystify the CTA and guide listeners through the compliance process.

Understanding the Corporate Transparency Act

What is the Corporate Transparency Act?

Richard Chamberlain begins by explaining the essence of the CTA:

"[00:31] Richard Chamberlain: The Corporate Transparency Act is a federal law that went into effect on January 1st of this year. It mandates that certain companies report their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN)." (00:31)

The primary objective of the CTA is to combat illicit activities such as money laundering and tax evasion by increasing transparency in business ownership structures.

Who Must Comply?

Determining Reporting Companies

Chamberlain delineates which entities fall under the CTA's reporting requirements:

"[10:55] Richard Chamberlain: You’re required to report your beneficial owner information, which includes individuals who own at least 25% of the company or those who exercise substantial control over it." (10:55)

Key points include:

• Ownership Threshold: Individuals owning 25% or more of the company.
• Control: Those who can make significant decisions on behalf of the company.
• Entity Types: Includes domestic corporations (S Corps, C Corps), LLCs, and other entities formed by state filings. Sole proprietors operating under a DBA are exempt.

Exemptions

Certain entities are exempt from the CTA, such as:

• Federally regulated companies (e.g., banks)
• Nonprofits
• Large companies with over 20 full-time employees, $5 million in gross revenue, and a physical U.S. office

Reporting Requirements

Information to be Reported

Chamberlain outlines the specific details required for compliance:

"[14:31] Richard Chamberlain: For each beneficial owner, you need their name, date of birth, address, a unique identifying number like a driver’s license number, and the state that issued the ID. Additionally, a copy or image of the identification document must be provided." (14:31)

Alternatively, obtaining a FinCEN identifier simplifies the process:

"[15:42] Richard Chamberlain: Getting a FinCEN identifier allows you to input this unique number instead of repeatedly uploading identification documents for each company you own." (15:42)

Filing Deadlines and Process

Key Deadlines

• Existing Entities: Must file by January 1, 2025.
• Newly Formed Entities Post-January 1, 2024: Must file within 90 days of formation.

Chamberlain emphasizes urgency:

"[16:24] Corinna Bench: It's time-sensitive, so let’s act now." (16:24)

How to File

The filing process is straightforward:

"[17:11] Richard Chamberlain: Visit fincen.gov/boi to access the beneficial owner information portal. You can file electronically or download a PDF form." (17:11)

No need for legal assistance unless your business structure is complex.

Penalties for Non-Compliance

Failure to comply with the CTA can result in severe penalties:

"[21:17] Richard Chamberlain: The penalties for non-compliance can be up to $500 per day, a maximum of $10,000, and even up to two years in jail." (21:17)

Corinna urges listeners to prioritize compliance to avoid these harsh penalties.

Resources and Further Information

Where to Learn More

Chamberlain recommends authoritative resources:

"[23:22] Richard Chamberlain: The best place to start is fincen.gov/boi, which offers FAQs and a Small Entity Compliance Guide." (23:22)

He also highlights his own resources for additional guidance:

"[27:32] Richard Chamberlain: Visit plansthatwork.net for my podcast and book, Protecting Your Family’s Future, available for free download on my website." (27:32)

Special Considerations

Reporting Company Applicants

If an attorney or third party assists in forming your entity, their information must also be reported:

"[18:21] Richard Chamberlain: If an attorney helped form your entity, they are considered a company applicant and their FinCEN identifier must be reported as well." (18:21)

Conclusion

Corinna wraps up the episode by reiterating the importance of complying with the CTA and encouraging farmers to take immediate action:

"[31:02] Corinna Bench: Please share this episode with your business owner or farmer friends to ensure they stay compliant." (31:02)

She also promotes her Farm Marketing School and various resources available for farmers looking to enhance their marketing strategies.

Notable Quotes

• Corinna Bench:

  "The deadline for the Corporate Transparency Act is December 31, 2024. Make sure you take action on this." (00:00)

• Richard Chamberlain:

  "The penalties can be very severe—$500 civil penalty per day for each day that you have not filed, up to $10,000 in penalties and up to two years in jail." (21:17)

• Corinna Bench:

  "It may only take 10 minutes, so that's really encouraging." (20:55)

• Richard Chamberlain:

  "If you haven’t set up a trust or a will, just go file." (29:54)

Action Steps for Farmers

1. Determine If You’re a Reporting Company: Assess if your farm business entity falls under the CTA.
2. Gather Required Information: Compile details of all beneficial owners.
3. Obtain a FinCEN Identifier: Simplify future filings by securing this identifier.
4. File by the Deadline: Ensure submission by January 1, 2025, for existing entities or within 90 days for newly formed ones.
5. Stay Informed: Utilize recommended resources and consider consulting a business attorney for complex situations.

By addressing the Corporate Transparency Act comprehensively, Corinna Bench equips farmers with the knowledge needed to navigate this regulatory landscape confidently. Ensuring compliance not only avoids hefty penalties but also contributes to a more transparent and accountable agricultural business environment.