New Federal LLC Law May Require Notaries to File Business Information by January 2025
Starting January 1, 2025, notaries operating as businesses may be required to file a beneficial ownership information (BOI) report with the federal government. This new mandate under the Corporate Transparency Act (CTA) aims to improve transparency, prevent fraud, and enhance security in business operations. If you own or operate a notary business, understanding and complying with this law is crucial to avoid penalties and ensure smooth operations.
What Is the New Federal LLC Law?
The CTA introduces new filing requirements for businesses to disclose ownership details to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). The goal is to prevent illegal activities such as money laundering, tax evasion, and fraud by requiring domestic reporting companies to submit ownership details.
While the law primarily targets larger corporations and LLCs, small businesses, including notaries operating independently or as LLCs, may also be affected. This ensures that senior officers and those who exercise substantial control over businesses are properly identified.
Do I Need to File a BOIR for My LLC?
If you run your notary services as a sole proprietorship without an LLC or corporation, this law may not apply. However, if your notary business operates under a:
- Limited Liability Company (LLC)
- Corporation (C-Corp or S-Corp)
- Partnership
You will likely need to file a BOI report with FinCEN. This applies to notaries who manage their services as a structured business entity.
What Information Needs to Be Filed?
Businesses must report:
- Owner’s Full Legal Name
- Date of Birth
- Current Residential or Business Address
- A Unique Identifying Number (from a government-issued ID such as a driver’s license or passport)
Existing businesses must file by January 1, 2025, while new businesses formed after this date must file within 30 days of formation. Updated reports are required if ownership changes.
What Happens If You Don’t File?
Failing to comply can lead to significant penalties:
- Up to $500 per day for late filings
- Criminal penalties, including fines up to $10,000 and possible imprisonment
Notaries should take this requirement seriously and ensure they understand their obligations under the law. Financial institutions may also require proof of filing to continue business services.
How to File Your Notary Business Information
- Determine If You Need to File – Review your business structure. Sole proprietors without an LLC may not need to file.
- Gather Required Information – Ensure you have the necessary personal and business details for filing, including information for any senior officers or individuals with substantial control.
- File with FinCEN – Submissions will be made through the Crimes Enforcement Network (FinCEN) online portal.
How to Stay Compliant
- Consult with Legal Advisors – Speak with a legal professional to verify if your business falls under this new requirement.
- Monitor Updates – Regulations may evolve, so stay informed by subscribing to industry newsletters or following relevant government announcements.
- File Early – Don’t wait until the last minute. Filing early helps avoid penalties and ensures compliance.
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Frequently Asked Questions (FAQ) on Beneficial Ownership Information Reporting
1. What is beneficial ownership information (BOI) reporting?
BOI reporting requires businesses to disclose key information about individuals who directly or indirectly own or control at least 25% of the business, or who exercise substantial control over the company. This helps the federal government prevent financial crimes.
2. Who needs to file a BOI report?
All LLCs, corporations, and partnerships must file, unless they qualify for an exemption. Sole proprietors generally do not need to file unless they operate under an LLC or corporation.
3. When is the BOI report due?
Existing businesses must file by January 1, 2025. New businesses must file within 30 days of formation. Any ownership changes must be updated within 30 days.
4. What happens if I don’t file on time?
Late or non-filing can result in fines of up to $500 per day, with potential criminal penalties of up to $10,000 and imprisonment.
5. How do I submit a BOI report?
BOI reports must be submitted online through the FinCEN portal. Detailed instructions and filing resources will be available on the FinCEN website.
Final Thoughts
The Corporate Transparency Act introduces new responsibilities for business owners, including notaries operating as LLCs or corporations. By understanding the requirements and filing on time, you can protect your business from unnecessary penalties and continue offering essential notarial services without interruption.
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