Corporate Transparency Act Update

About the Corporate Transparency Act

The Federal Corporate Transparency Act (CTA) took effect on January 1, 2024. While the new requirement has undergone various challenges and legal cases, it remains in effect. Entities required to comply with the CTA’s disclosure filing should continue to do so. As we have advised previously, the CTA mandates qualifying entities to submit Beneficial Ownership Information (BOI) Reports to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).

Corporate Transparency Act: Key Points

As we approach the year’s end, here are key points to consider:

• Entities classified as reporting companies are required to file BOI Reports with FinCEN, including updates as needed. This may involve submitting separate BOI Reports for each subsidiary within a larger organizational structure. Noncompliance with filing could result in civil penalties of $500 per day, criminal penalties of up to $10,000 and up to 24 months in prison.
• For entities formed after January 1, 2024, the initial BOI Report must be filed within 90 days of formation. However, starting January 1, 2025, this deadline will be shortened to 30 days. Entities established before January 1, 2024, must file their initial BOI Report by December 31, 2024.
• Analyzing which entities within your structure qualify as reporting companies and identifying the significant owners or decision-makers who must provide their FinCEN identification number or personal information can be time-consuming. If you still need to start this process, we recommend doing so immediately and consulting with a qualified professional to ensure timely and accurate filings.
• Even if you believe your entity is exempt from reporting, consult with a qualified professional to be sure. Certain situations, such as those involving dissolved entities, may still require a BOI Report under current FinCEN guidelines.
• Our firm does not file BOI Reports on behalf of clients. Clients needing assistance with filings should contact third-party companies, such as Corporation Service Company, to help with the compliance process.

We will keep you updated on any developments regarding the Corporate Transparency Act. We encourage you to subscribe to our newsletter to receive these updates.