Medical practices, dental practices and other health care entities must again comply with the federal Corporate Transparency Act (“CTA”). The deadline for compliance is March 21, 2025.
What You Need to Know:
- The Corporate Transparency Act filing deadline is now March 21, 2025.
- Medical practices and health care businesses will need to comply with the CTA unless the entity qualifies for an exception.
- Saul Ewing can help your organization with its CTA analysis and filing.
The CTA, enacted in 2021, added a new beneficial ownership information reporting requirement to make it more difficult to conceal or profit from illicit activities.
The CTA applies to corporations, limited liability companies (LLC), and other entities created by the filing of a document with a secretary of state or any similar office, as well as to foreign entities that are registered to do business in any state or any similar office, and requires reporting companies to submit beneficial ownership information reports (“BOIR”) to the Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) and disclose information regarding the reporting company, its beneficial owners, and its company applicants.
When filing BOIRs with FinCEN, reporting companies must identify themselves and provide four (4) pieces of information about each of their beneficial owners: name, birthdate, address, and a unique identifying number and issuing jurisdiction from an acceptable identification document (and the image of such document). There are additional requirements for companies created after January 1, 2024.
Most medical practices and other health care entities will need to file a BOIR unless they can qualify for one of the 23 exemptions under the CTA. The list of exempt entities may be found here.
The most likely relevant exemption for medical practices and other health care entities is the “Large Operating Company Exemption” which applies to entities that:
- Employ more than 20 full-time employees;
- Have an operating presence at a physical office within the U.S.; and
- Filed a federal income tax or information return for the previous year demonstrating more than $5 million in gross receipts or sales.
Federal court orders temporarily halted BOIR requirements between December 3, 2024, and February 18, 2025; however, with a limited exception the court orders have been stayed, and BOIR requirements under the CTA are again mandatory with new reporting deadlines.
The new CTA reporting deadlines are:
- For most companies that must file a report, the deadline to file initial, updated, and/or corrected BOIRs is March 21, 2025.
- Companies formed or registered on or after February 18, 2025 that need to file a report must file initial BOIRs within 30 days after the date of creation or registration.
Medical practices and other health care entities must comply with the CTA requirements, even though they were not the target of the CTA. Note that compliance extends to any entities in your organization. For many medical practices, this means ancillary business entities formed for investments in real estate, management service organizations, ambulatory surgery centers, billing services, and other joint ventures.
Suggested Next Steps:
- Confirm whether any of the entities in your health care organization qualify for a CTA exemption.
- If an entity does NOT qualify for an exemption, then that entity must file a BOIR.
