Fear Not!  How to comply with the Corporate Transparency Act?

If you have seen anything in the news about the Corporate Transparency Act (“CTA”), it tends to be that it is a scary new law for business owners.  We’re here to break it down for you.

What is it?

The CTA was enacted by Congress on January 1, 2021, with the aim of enhancing national security, intelligence, and law enforcement agencies’ ability to counter money laundering, terrorism financing, and other illicit activities that pose a threat to national security. The CTA requires most domestic businesses and foreign businesses registered to do business in the U.S. to disclose personal identifying information about their beneficial owners, senior officers, and other control persons to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).  

Who is covered?

Every business entity in the U.S. that does not fall into one of the CTA’s exempt categories is required to file a beneficial ownership information report that identifies each beneficial owner of the entity.  Even if you are exempt, we recommend that you review and document your exemption properly.

When do you need to file?

If you were created or registered to do business before January 1, 2024, you have until January 1, 2025 to file your initial beneficial ownership information report.

If you were created or registered on or after January 1, 2024, and before January 1, 2025, you will have 90 calendar days after receiving notice of the company’s creation or registration to file your initial BOI report.

If a company is created or registered on or after January 1, 2025, it will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file its initial BOI reports with FinCEN.

What if the information on the Beneficial Ownership Information Report changes?

If there is any change to the required information about your company or its beneficial owners, you must file an updated report no later than 30 days after the date of the change.  This would include, a new business name, address or EIN, a new CEO, or a sale that changes who meets the ownership interest threshold of 25 percent or any change to a beneficial owner’s name, address, or unique identifying number previously provided to FinCEN.

How to file?

Check out the FinCen website or give us a call at 240-202-4302.

What happens if you do not comply with the CTA?

If you do not comply, the government does have the authority to access civil money penalties (up to $500 per day for each day the violation persists unremedied) and criminal penalties (a fine of up to $10,000, imprisonment for up to 2 years, or both) for anyone committing a willful violation.  It is best not to delay and take care of this compliance requirement.

Need help complying with the CTA?  Give us a call.

Natasha M. Nazareth, Esq.
Ginny Cascio Bonifacino, Esq.

Partners

240-202-4302
Natasha@dmvbusinesslawyers.com
Ginny@dmvbusinesslawyers.com