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Minnesota Ag News Headlines |
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Corporate Transparency Act Reporting Obligations
Minnesota Ag Connection - 01/17/2024
A new federal reporting requirement for most small business entities will impact a number of farms, ranches, and agricultural businesses who have organized as a business entity such as an LLC, corporation, or limited partnership. We’ve got the answers to your questions below!
Why?
The Corporate Transparency Act is a law enacted to prevent money laundering, corrupt financial transactions, and financial terrorism. As part of that effort, the Act requires the United States Department of Treasury’s Federal Crimes Enforcement Network (FinCEN) to maintain a national database of beneficial owners of entities that are not otherwise subject to disclosure requirements. The purpose of the CTA is to “better enable critical national security, intelligence, and law enforcement efforts to counter money laundering, the financing of terrorism, and other illicit activity” by creating a national registry of beneficial ownership information for “reporting companies.” In order to develop and maintain this database, FinCEN will require entities to file a Beneficial Ownership Information Report (BOIR) online.
Who?
The reporting requirements apply to most small entities. This includes LLCs, corporations, and any entities created by filing a document with the Secretary of State or other similar agency. This does include single member LLCs. For many states, that will include limited partnerships, limited liability partnerships, and limited liability limited partnerships. Depending on state rules, this may also include certain business trusts. General partnerships and sole proprietorships are not required to report as there is no filing requirement for these entities.
There is a long list of entities that are exempt from reporting including publicly traded companies, certain tax exempt entities, certain banks, certain insurance companies, and others. To read more on the exemptions, click here. Importantly, most farm and ranch entities will likely not fall under the listed exceptions.
What?
There are essentially three categories of information that must be provided: entity information; beneficial owner information; and company applicant information.
Click here to read more agrilife.org
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