NEW REPORTING REQUIREMENTS – Corporate Transparency Act

A new federal law called the Corporate Transparency Act (“CTA”) went into effect as of January 1, 2024.  All entities will need to comply with the reporting requirements under the CTA.

What is the CTA?
It requires “Reporting Companies” to provide specific information about beneficial owners to the Financial Crimes Enforcement Network (“FinCEN”) of the US Department of the Treasury.

Who is a “Reporting Company”? 
A domestic or foreign privately held corporation, limited liability company, limited partnership, or other similar entity that is created by filing a document with the Secretary of State or similar office and which does not qualify for an exemption.

What must be reported?
Information about individuals who (i) own the company, (ii) serve in important positions within the company, and (iii) formed the company.

What is the deadline for reporting?
Any new Reporting Companies formed on or after January 1, 2024, must report beneficial ownership information to FinCEN within ninety (90) days of formation, while Reporting Companies currently in existence must report beneficial ownership information to FinCEN prior to January 1, 2025.

What are the violation penalties?
Penalties include civil penalties up to $500 per day and criminal penalties in the form of fines up to $10,000 and imprisonment.

The applicability and extent of the reporting requirements are determined on an entity-by-entity basis.   If you do wish to engage us to help with this new requirement, please contact us as soon as possible, and we will prepare a separate written engagement with you that will define the scope of our assistance.  If engaged to do so, we will begin the process of determining if it is a reporting entity. If you wish for our assistance in any way, you will need to contact us and engage us in writing to do so.  Please contact us if you have any questions or would like to discuss them further.