What is the Corporate Transparency Act? The Corporate Transparency Act has created an important new reporting requirement for many businesses, including camps. Millions of "Reporting Companies" are now required to provide information about their senior officers and beneficial owners to the Treasury Department's Financial Crimes Enforcement Network. The goal of the new law is to prevent bad actors from taking advantage of the US financial system. The primary obligation for camps is to report their beneficial ownership information to the government.
What are Reporting Companies? Reporting companies include all corporations, LLCs, and other entities that were created by filing formation documents with their secretary of state, unless they fall within one of the 23 categories of exempt businesses.
What do camps need to report? The Corporate Transparency Act requires camps to report "beneficial ownership information," which refers to identifying information about the individuals who directly or indirectly own the camp.
Which exemptions are most relevant to camps? Of the two dozen potential exemptions, two seem most relevant to camps: first, certain tax-exempt organizations are exempt from the reporting requirements, and second, "Large Operating Companies" are also exempt.
What are Large Operating Companies? To qualify as a Large Operating Company (and thereby be exempt from reporting obligations), a camp must meet six specific requirements, including the following: (1) the camp must employ more than 20 full time employees in the US; (2) the camp must have at least $5 million in gross receipts/sales on its tax return; and (3) the $5 million in gross receipts/sales must be derived from US sources (i.e., revenue from foreign campers should be excluded).
When is the reporting deadline? Assuming a camp was in existence as of January 1, 2024, it has until January 1, 2025 to report beneficial ownership information. This information must then be regularly updated in the event of changes. The Financial Crimes Enforcement Network began accepting filings on January 1, 2024.
What should camps do now? If your organization is not entitled to an exemption, then you should make the required filing to provide beneficial ownership information to the government. Among other steps, you should inform beneficial owners, senior officers, and others with "substantial control" that you'll need to file certain personal information about them. You should then make a plan to gather and file that information as required by the new law.
What are the penalties for failing to report? As explained in a Financial Crimes Enforcement Network FAQ (link below): "[A] person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. That person may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information."
What resources are out there to help camps comply with the Corporate Transparency Act? The Financial Crimes Enforcement Network put out a useful FAQ and Small Entity Compliance Guide