Businesses should review new Pennsylvania annual reporting and Federal beneficial ownership information reporting requirements ahead of approaching deadlines.
October 9, 2024
By: Ron Lefebvre and Mark Fischer
The deadlines are approaching for all Pennsylvania businesses to file annual reports with the Pennsylvania Department of State and for many United States businesses to file beneficial ownership reports with the US Department of Treasury, pursuant to new laws passed at the state and federal levels.
Annual reporting requirement for Pennsylvania businesses
On November 3, 2022, then Governor Tom Wolf signed into law Pennsylvania’s Act 122 of 2022 (the “Act”). The Act creates an obligation for Pennsylvania businesses, and Pennsylvania registered foreign businesses, to file an annual report with the Department of State. The annual report must include the following information:
- Business name
- Jurisdiction of formation
- Registered office address
- Name of at least one governor (director, member, partner, etc. depending on type of association)
- Names and titles of the principal officers, if any
- Address of the principal office
- Entity number issued by the Pennsylvania Department of State
The filing deadline varies depends on the type of business association: for corporations the deadline is June 30 of each year; for limited liability companies the deadline is September 30 of each year; and for any other domestic entities and foreign associations, the deadline is December 31 of each year.
This annual reporting requirement begins in 2025. That means that business entities should plan to file prior to the above-listed deadlines next year. There is a small fee for for-profit entities, and no fee for non-profit entities.
Failure to file the annual report in compliance with the Act can result in harsh penalties, such as: administrative dissolution, termination, or cancellation, and loss of protection for the entity’s business name. The Department of State has indicated that such penalties will not be enforced until 2027, however.
Federal beneficial ownership information reporting requirement
In 2021, Congress enacted the Corporate Transparency Act (the “CTA”), in an effort to prevent bad actors from using anonymous companies to launder illicit funds, or to commit other crimes. To promote greater disclosure of ownership, the CTA requires most businesses to file a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN). Our firm previously addressed the CTA requirements, and some of the exemptions which may apply to your business, in this linked article: https://www.ymfzlaw.com/corporate-transparency-act-compliance/.
As a reminder, the CTA went into effect on January 1, 2024. Businesses which existed prior to that date have until January 1, 2025 to file its BOI report with FinCEN. Businesses which were newly formed or registered in 2024 have 90 days from the date of their registration to file its BOI report. Beginning in 2025, however, newly formed business will have only 30 days to file its BOI report.
Willful violation of the CTA can carry hefty civil penalties of up to $500 a day, and criminal penalties up to two years imprisonment and a $10,000 fine.
Please contact our firm if you would like assistance with respect to compliance with these new reporting requirements, or to better understand their effect on your business.
YMFZ is a closely-held Pittsburgh law firm which for more than 30 years has been offering good counsel, personal attention, and cost-effective representation to its clients for all manner of business legal needs, including commercial litigation, business set-up and finance, commercial and technology contracting (including bank representation), employment law, real estate (including oil and gas), and intellectual property. YMFZ clients include both large national and multi-national corporations and regional and local businesses. For more information on our firm, please visit www.ymfzlaw.com.