October 18, 2024
Kevin Shaftan, a New York-based associate at Wilson Elser, discusses the Corporate Transparency Act and the Beneficial Ownership Information (BOI) reporting deadlines and how accountants can use them to defend against professional liability claims.
The Rules
For companies created prior to Jan. 1, 2024, you have until Jan. 1, 2025, to file. Reporting companies created in 2024 will have 90 days from the company's creation to file their initial report. And for those reporting companies created after Jan. 1, 2025, they'll have 30 days to file their initial report. An updated report on entity or ownership changes is due within 30 days of the change. Any corrected reports are due within 30 days after becoming aware of the error.
An effective tool for accountants in mitigating the risks in incurring professional liability is an engagement letter. This is especially critical for a new service like the BOI reporting. For an engagement letter to be effective, it should contain certain key elements:
- The engagement letter should stand alone and not be combined with other services.
- Each reporting company or entity gets its own engagement letter.
- It should focus on clearly defining the scope of services--initial, updated, or corrected report.
- It should describe the client's responsibilities and define your limited undertaking.
- It should indicate the start and conclusion of the engagement.
- It should identify the deliverables.
- It should identify the penalties for non-compliance.
This is something that everybody should be concerned about, since the engagement letter is going to be your best defense if you are going to handle the Beneficial Ownership reporting on behalf of your clients.
This information originally appeared on Wilson Elser. www.wilsonelser.com.
About the Author:
Kevin Shaftan is an associate at Wilson Elser. kevin.shaftan@wilsonelser.com