Attention cannabis business owners: Are you aware of the new BOI reporting requirements under the Corporate Transparency Act that could impact your company?
The Corporate Transparency Act (CTA), passed in 2021, mandates certain companies, including those in the cannabis industry, to report their beneficial ownership details to FinCEN. Law firms specializing in cannabis law play a crucial role in assisting businesses with accurately filing these reports, ensuring compliance with the CTA while navigating regulatory complexities.
Understanding Beneficial Ownership Reporting
While this new regulation might seem confusing, it’s important to understand the requirements under the Corporate Transparency Act (CTA).
Beneficial ownership reporting involves sharing details about individuals who have significant control over a company or own 25% or more of its ownership. This includes their names, addresses, and ownership percentages. Beneficial ownership reporting is a way to prevent misuse of businesses for illegal activities like money laundering.
This new regulation promotes fairness and integrity in business operations and helps maintain trust in the marketplace.
Non-compliance can result in penalties, including fines of up to $500 per day for failure to file timely reports, with a maximum fine of $10,000.
In extreme cases, individuals may face potential jail time for failure to file BOI reports. Therefore, understanding and adhering to the reporting requirements is crucial for businesses to avoid legal repercussions and maintain compliance with the law.
Why Does My Dispensary Need to File Another BOI Report?
Many cannabis businesses are familiar with disclosing beneficial ownership information for state licensing.
However, it’s important to note that a new federal reporting requirement applies to all companies, including those in the cannabis industry. Unlike state rules, which vary, the federal Corporate Transparency Act ensures consistent ownership transparency nationwide.
So, this means that even if a business is compliant with state regulations, it must still adhere to federal reporting standards. This federal rule, while similar in intent, adds an additional layer of reporting for businesses, regardless of their state-specific requirements.
Does My Business Qualify For a BOI Exemption?
Some companies, like securities reporting issuers, large operating companies, and inactive entities, are exempt from certain reporting requirements. However, understanding these exemptions can be tricky. FincenFetch provides an exemption checker tool for added convenience. This tool helps businesses figure out if they meet any of the 23 exemptions listed by FinCEN. It makes following the rules easier and ensures that businesses are doing everything they need to under the law.
How to Start Filing a Beneficial Ownership Report
Law firms specializing in financial compliance can leverage our software to simplify their processes and assist clients effectively. Start setting up your FinCENFetch dashboard today to facilitate your clients’ beneficial ownership reporting.
Our platform makes it easy to submit reports directly to FinCEN. Whether you’re starting or updating your client’s BOI report, our platform guides you through each step. Following our simple process ensures your report is accurate and sent on time.
With FincenFetch, you avoid complex forms and receive timely reminders, ensuring you meet deadlines without hassle. Begin your BOI report journey with us and proceed confidently at every stage.
Staying Informed and Up-to-Date
Compliance with the Corporate Transparency Act is vital for cannabis businesses to avoid penalties, which can include fines and even jail time.
Understanding the rules and seeking assistance when necessary makes the process simpler. Keeping informed and prepared allows businesses to adapt to new regulations quickly.
Law firms, Get started setting up your FinCENFetch dashboard to assist your clients today! Don’t wait until it’s too late. File their beneficial ownership reports now to ensure compliance with the Corporate Transparency Act.
Stay informed, stay proactive, and safeguard your clients’ businesses from regulatory risks
