We are getting lots of questions about the Corporate Transparency Act (CTA) and how its reporting requirements affect community associations. Did you know that last week, FinCen published its Beneficial Ownership Reporting Outreach and Education Toolkit? Linked here, this resource is intended to help companies comply with the CTA’s reporting requirements.
The CTA requires all companies created through a secretary of state, including non-profit community associations, to file Beneficial Owner Information (BOI) reports, unless an exemption applies. Most community associations will not qualify for an exemption, but of course, you should consult with your own association attorney for any specific questions about your community.
We have been telling clients that the simplest way to comply with the CTA, once they are ready to do so, is for each board member (considered a beneficial owner) to apply for their own FinCen ID number, a process which should only take a handful of minutes. This allows individual board members to protect their personal identification information (reporting it only to the government, which already has it!). Then, board members provide their individual FinCen ID numbers to their association, which as the reporting company, can use those ID numbers in its own report.
A few other things to note: Document your association’s decisions and steps to comply with the CTA. If your compliance is ever at issue, having a clearly documented process and “chain” of decisions could be helpful.
Note also that you must report a “principal place of business,” which cannot be a P.O. Box – a street address is required.
If there is a change in BOI info – such as after board elections or when a board member resigns – the Association must update its CTA report within 30 days.
Finally, entities created in 2024 must file a CTA report within 90 days of the entity’s creation. Entities created before 2024 have until December 31, 2024 to file a report.
