| QUICK FACTS:
· Most community associations are required to comply. · Board members will have to provide their personal identifying information (name, date of birth, address, driver’s license and/or passport). · Community associations must file a report every time a board member is removed or added (within 30 days of that change). · While exemptions do exist, most community associations do not qualify for exemption. · Anyone filing on behalf of the community association will also have to provide their personal identifying information. BACKGROUND: The Corporate Transparency Act took effect on January 1, 2024, and imposes strict reporting requirements on nearly all business entities in the US, including Community Associations. Compliance is mandatory. Failure to comply by December 31, 2024, can lead to severe penalties. These penalties include daily fines of $500, and/or imprisonment of up to 2 years. Congress passed this law to enhance transparency in business structures in an effort to combat money laundering and other financial crimes. The law is enforced by the Financial Crimes Enforcement Network (called “FinCEN”), an office within the U.S. Department of Treasury. The law requires existing associations to file a report called a Beneficial Ownership Information (“BOI”) report by December 31, 2024. A beneficial owner is defined as an individual who directly or indirectly exercises “substantial control” over the business entity. Under this standard, our position is that every board member of an association is a beneficial owner who must provide information to FinCEN. Depending upon the individual circumstances of an association, additional parties may be classified as beneficial owners. After the initial report is filed, community associations have an ongoing obligation to file amended reports within 30 days of any changes in the reported information. This means amended reports are required whenever a new board member is elected, resigns, or if their address or legal name changes. Amended reporting is also required within 30 days after the discovery of an error in any prior report. It is imperative for associations to maintain accurate and up-to-date records in order to fulfill these reporting requirements. Attorneys at VF Law are available to handle your FinCEN reporting and are ready to answer any questions you may have concerning your association’s responsibilities under the Corporate Transparency Act. |
