Effective January 1, 2024, the Corporate Transparency Act (CTA) introduces a significant regulatory shift for many businesses. In a step forward in the government’s efforts to combat financial crimes like money laundering, this act mandates the disclosure of Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). Unlike typical tax regulations, the CTA falls under the Bank Secrecy Act and requires reports to be filed directly with FinCEN.

Who does this Affect?

The CTA applies to both domestic and foreign entities registered or formed under U.S. state or tribal laws. However, there are notable exemptions, particularly for large operating companies that meet specific criteria. Understanding whether your business falls within the scope of the CTA is crucial, as non-compliance can result in severe civil and criminal penalties.

Understand whether your business falls within these requirements and prepare accordingly. Non-compliance can lead to significant civil and criminal penalties.

You may need to report if your company is:

• A Corporation, a Limited Liability Company (LLC), or was otherwise created in the United States by filing a document with a Secretary of State or any similar office under the law of a state or Tribal Nation.
• A foreign company registered to do business in any U.S. state or Tribal Nation.

Your action steps:

The key is understanding whether your business falls within these requirements and to prepare accordingly. Non-compliance can lead to significant civil and criminal penalties.

1. Assess Your Business Category: Check if your business is subject to reporting under the CTA. This includes reviewing any foreign entities under your control.
2. Seek Expert Legal Advice: Consult with your legal team to understand your specific obligations under the CTA.
3. Gather Required Information: If you fall under the CTA, start compiling the necessary details, focusing on beneficial ownership.

Key deadlines:

Entities established prior to 2024 have until January 1, 2025, for initial reporting.

However, newly formed entities have different deadlines. If your company was created or registered in 2024, you must report BOI within 90 calendar days after receiving the actual or public notice your company’s creation or registration is effective, whichever is earlier.

Going forward, if your company is created or registered on or after January 1, 2025, you must file the BOI within 30 calendar days after receiving notice your company’s creation or registration is effective.

For more information:

For more info, including FAQs and how to file, check out these useful sites:

Beneficial Ownership Information

Filing the Beneficial Ownership Information Report

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