At the beginning of the year, we discussed the new federal Corporate Transparency Act (“CTA”) that took effect on January 1st, 2024. (Check out that blog here!)
In short, many small businesses and its owners were impacted and are required to submit Beneficial Ownership Information ("BOI") reports. Noncompliance with the CTA may result in steep fines ($500/day + $10,000 for criminal fines), plus a possibility of two years in jail.
However, there are 23 scenarios that exempt a company and its owners, meaning that you do not have to submit a BOI report.
Specifically, Exemption #23 provides that an “inactive entity” is exempt from the reporting requirements.
To be considered an "Inactive Entity, your company must meet ALL (6) of the following conditions:
Chart by FinCEN from the Small Entity Compliance Guide.
If you are ready to submit a BOI report, check out PB’s Law Guide to the CTA + BOI for more information!
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By: Lilian Xie | PB Law Summer Law Clerk | J.D. Candidate, Class of 2026 William S. Boyd School of Law | University of Nevada, Las Vegas