The Corporate Transparency Act
The burdensome new beneficial owner reporting requirements under The Corporate Transparency Act (the “CTA”) took effect January 1, 2024. Those owning 25% or more of a business entity (such as an LLC or corporation), or those having substantial control over a business entity, are considered “Beneficial Owners” and are subject to CTA reporting requirements. Effective January 1, 2024, Beneficial Owners of existing business entities must file an Initial Report with the Financial Crimes Enforcement Network prior to December 31, 2024 to avoid penalties.
You will need the following information for each Beneficial Owner in order to file the Initial Report: (1) full legal name; (2) date of birth; (3) current address; and (4) unique identification number from an acceptable identification document (i.e. a U.S. passport or State driver’s license) and a copy of such identification document. Entities established prior to January 1, 2024 must locate this information and file an Initial Report prior to December 31, 2024, otherwise you may face penalties of up to $500 per day. Entities established after December 31, 2023 must file an Initial Report within 30 days of creation to avoid penalties. Additionally, entities must keep information reported to FinCEN current throughout the entity’s existence. If parties owning 25% or more of, or exercise substantial control over, a business entity changes, then you must report this information to FinCEN within 30 days of such change.
To file the Initial Report, and for additional information on the CTA, please visit: https://www.fincen.gov/boi.