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Corporate Transparency Act for Dental Offices

Corporate Transparency Act for Dental Offices Image

By Olivia Wann, JD

Are you a LLC, a PLLC or corporate entity?  Be aware that Congress passed the Corporate Transparency Act in 2021. The new federal reporting requirement for beneficial ownership information goes into effect beginning January 1, 2024. The goal of this new law is to prevent money laundering and other financial crimes, including terrorist financing.

Individuals who own or control the company are referred to as “beneficial owners” and are required to report their beneficial ownership interest (BOI) to the federal government. In the words of the U. S. Department of the Treasury Financial Crimes Enforcement Network, this new law will make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.

There are exemptions to the law. Publicly traded companies, nonprofits and certain large companies are exempt from reporting. Also exempt are sole proprietors.

There are actually a total of 23 exemptions listed in FinCEN’s Small Entity Compliance guide.

To meet the large operating entity exemption, the business must meet all three of the following thresholds:  1) operate from a physical commercial street address in the U.S., 2) have 21 or more full-time U.S. employees, and 3) generate more than $5 million in annual U.S. gross receipts as reported on the prior year’s tax return.   However, we anticipate this new federal law to affect many of our dental practices that we serve.

In order to achieve compliance, you must report personal identifying information to include name date of birth physical home address and your photograph. 

If you formed your business prior to January 1, 2024, you have one year to comply with reporting. If your business is formed after January 1, 2024 through December 31, 2024, you have 90 days to report.  For businesses formed after January 1, 2025, you have 30 days to report.

Who has access to this information that you report?  Law enforcement at the federal, state and local levels have access, but such information will not be available to the general public.  If you fail to report, the fines range $500 per day up to $10,000) per incident. 

You report your beneficial ownership interest through FinCEN’s website:  www.fincen.gov/boi.

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