Key Takeaways

  • The Corporate Transparency Act (CTA) introduces new LLC reporting requirements effective January 1, 2024, focusing on beneficial ownership information (BOI).
  • LLCs formed in or after 2024 must file their initial BOI report within 90 days of formation; existing LLCs formed before 2024 must file by January 1, 2025.
  • Reporting companies must disclose information on beneficial owners and company applicants.
  • Significant penalties apply for noncompliance, including daily fines and potential criminal charges.
  • Certain LLCs, such as large operating companies and highly regulated entities, may qualify for exemptions.
  • Staying compliant with both state annual report filings and new federal BOI requirements is crucial for maintaining good standing.

LLC reporting requirements vary from state to state and consist of the regular reports and fees required for a limited liability company (LLC) to remain in good standing within the state it is formed.

LLC Filing Requirements

The requirements for reporting and filing taxes will depend on the state where the owners (or members) formed the LLC. 

LLCs are required to file annual reports in most states along with an annual reporting fee or tax. If these reports are not filed on time, there can be expensive and problematic consequences for the company. 

Understanding Beneficial Ownership Reporting

Under the Corporate Transparency Act (CTA), effective January 1, 2024, many LLCs must now file beneficial ownership information (BOI) reports with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). This requirement is part of federal efforts to prevent illicit activities like money laundering, terrorist financing, and tax evasion by increasing corporate transparency.

What is Beneficial Ownership?A beneficial owner is any individual who, directly or indirectly:

  • Owns or controls at least 25% of the company’s ownership interests, or
  • Exercises substantial control over the company.

The BOI report must identify these individuals and provide specific information to FinCEN.

LLC Annual Report Filing Requirements

Once an individual or partnership decides to start an LLC, one of the first steps they should take is understanding their state's requirements for filing and reporting. 

The LLC owner(s) must contact their Secretary of State's office or the appropriate division or agency for business filings in the state to file their annual reports, sometimes referred to as "Statements of Information."

Depending on your particular state, you may need to file reports every year and anytime something changes with the company. These filings are usually accompanied by fees, but every state is different. 

First, LLC owners will want to find out if annual reports are even required by their state. Some states, like Ohio and Delaware, don't actually require annual reports, but most states will still ask for Statements of Information from all businesses in the state to be sure that the state knows which companies are actually still conducting business. 

This information is made fairly easy to provide since the state usually requires you to fill out a form. The Statement of Information forms typically ask for the following information:

If an LLC decides to change its name or dissolve the company, they'll likely need to file additional documents and pay the appropriate fees. 

Even though they're called "annual reports," many states don't actually require businesses to file on a yearly basis. 

Most states do require some kind of annual reporting or information confirmations and updates regarding businesses, but the timeline for these requirements varies from state to state. Every state has a set of LLC laws that govern how LLCs are handled and where the requirements for reporting are spelled out. 

LLCs in California, for instance, are required to file reports every other year, but states like Pennsylvania only require these types of reports on a 10-year cycle. 

Who Must File Under the New LLC Reporting Requirements?

The new federal reporting requirements apply to "reporting companies," which generally include:

  • Domestic LLCs formed by filing documents with a Secretary of State or similar office.
  • Foreign LLCs registered to do business in the U.S.

Exemptions include:

  • Large operating companies with more than 20 full-time employees, $5 million in gross receipts, and a physical presence in the U.S.
  • Certain regulated entities like banks, credit unions, insurance companies, and accounting firms.
  • Tax-exempt entities recognized under 501(c) of the Internal Revenue Code.

It is important for LLC owners to verify whether their business qualifies as a reporting company or is exempt from these federal reporting rules.

Filing Deadlines

Not only do states differ in how often they require LLC information reports, but they also have different deadlines. LLC owners will want to be sure of their particular state's deadlines in order to avoid late fees or other penalties. 

Some states require all LLC reports to be filed by the same deadline. Others use the date that each particular LLC was formed as the deadline for that LLC's annual report. This type of deadline will either be the exact date the business was formed, or the first or last day of the month in which it was formed.

Deadlines for Beneficial Ownership Reporting

The timeline for filing BOI reports under the new LLC reporting requirements depends on when the LLC was formed:

  • LLCs formed before January 1, 2024:
    Must file their initial BOI report by January 1, 2025.
  • LLCs formed on or after January 1, 2024:
    Must file their initial BOI report within 90 calendar days of formation.
  • Changes to Reported Information:
    If there are updates (such as a change in beneficial owners or company applicants), the LLC must file an updated report within 30 calendar days of the change.
  • Correction of Errors:
    Corrections must be submitted within 30 calendar days of discovering inaccurate information.

Filing Fees 

Some states require fees along with their reporting requirements for LLCs. These fees differ from state to state and can be found on the state's Secretary of State website or state's business division. 

What Information Must Be Reported?

The BOI report must include the following details:

  1. Company Information:
    • Full legal name
    • Any trade names or DBAs
    • Business street address
    • State or tribal jurisdiction of formation or registration
    • Taxpayer Identification Number (TIN)
  2. Beneficial Owner Information (for each owner):
    • Full legal name
    • Date of birth
    • Residential address
    • Unique identifying number from an acceptable document (e.g., passport or driver’s license)
    • Image of the identification document
  3. Company Applicant Information (for LLCs formed on or after January 1, 2024):
    • Similar details as required for beneficial owners
    • Applies to the person who files the formation documents and the individual directing or controlling the filing

Consequences for Missed Filing Deadlines

If an annual report or other required document is not filed by an LLC, the business may incur consequences. Usually, the business will be sent a reminder if the deadline is missed. If the LLC still fails to file, the state might:

  • Dissolve the LLC
  • Charge late fees
  • Take away the liability protection provided by the business structure, which opens members up to financial obligations

If an LLC loses its status of good standing with the state due to late filing or failure to file, the state will probably require the LLC to catch up on any outstanding payments, late fees, and taxes for all missed years in order to regain the ability to conduct business in the state. 

The filing requirements for LLCs are actually quite simple in most states and are made easy by the state providing options to file online. 

Penalties for Noncompliance with BOI Reporting

Failure to comply with the new LLC reporting requirements may lead to severe penalties:

  • Civil penalties of up to $500 per day for each day the violation continues.
  • Criminal penalties, including fines up to $10,000 and/or imprisonment for up to two years for willfully failing to file or providing false information.

To avoid these consequences, LLC owners should maintain accurate records, track any changes to ownership, and ensure timely submission of initial and updated reports.

If you need guidance navigating the new LLC reporting requirements, consider consulting a qualified attorney. You can find experienced legal professionals through UpCounsel’s attorney marketplace.

Frequently Asked Questions

  1. What are the new LLC reporting requirements for 2024?
    The new requirements under the Corporate Transparency Act mandate that many LLCs report beneficial ownership information to FinCEN to improve corporate transparency and prevent financial crimes.
  2. Which LLCs are exempt from the new reporting requirements?
    Exemptions apply to large operating companies, certain regulated financial institutions, and tax-exempt nonprofit organizations. Verify your exemption status before skipping reporting.
  3. What happens if I miss the filing deadline for my BOI report?
    Missing the deadline can result in daily civil penalties and potential criminal charges for willful noncompliance or false reporting.
  4. How often do I need to update my BOI report?
    You must file an updated report within 30 calendar days of any changes to the reported beneficial ownership or company applicant information.
  5. Is there a fee to file the beneficial ownership information report?
    As of now, FinCEN does not charge a fee for filing the BOI report, but state annual report fees still apply separately.

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