On January 1, 2024, the Corporate Transparency Act (CTA) officially took effect. Pursuant to the CTA, most companies are now required to disclose beneficial ownership information for any person or entity owning a 25% or more direct or indirect interest in a company (a “Beneficial Owner”), as well as information identifying all executive decision makers and/or those parties having substantial control over the company, to the Financial Crimes Enforcement Network (FinCen) of the United States Department of Treasury. Reporting is done through FinCen’s secure website, https://boiefiling.fincen.gov/boir.
Companies required to comply with the CTA include limited liability companies, corporations, limited partnerships and limited liability partnerships and other entities formed by filing with the Secretary of State, State Treasurer or other registrars of business entities in the jurisdiction of formation.
Certain companies are exempt from reporting requirements, such as banks, credit unions, insurance companies, public utilities, most non-profit corporations, public companies, and large operating companies (companies employing 20 or more full time employees, having a physical office located in the United States and having filed a U.S. federal tax return reporting more than $5,000,000 in gross receipts or sales).
Each company that is required to report to FinCen (a “Reporting Company”) must disclose its full legal name (including any trade names or “doing business as” names), business address, employer identification number and jurisdiction of formation. Each Beneficial Owner, as well as the party submitting the report on behalf of a Reporting Company (an “Applicant”), must provide its full legal name, home address, date of birth and the issuing jurisdiction and identification number of a current U.S. passport, military identification card or driver’s license, along with a copy of such identification (“BOI Information”). Individuals desiring privacy, and those individuals who hold beneficial ownership interests in multiple entities, may obtain a FinCen Identifier, which may be reported in lieu of providing personal BOI Information.
The Applicant, on behalf of its Reporting Company, will submit an online beneficial ownership information report containing the relevant information through FinCen’s website. It should be noted that BOI Information is not accessible by the general public.
Ongoing compliance with the CTA is mandatory for the duration of the existence of the Reporting Company. Reporting Companies are required to report any changes in ownership interests, management, home or business addresses or CTA non-applicability (i.e., termination, dissolution, name change or merger or consolidation of an entity) within thirty (30) days of an event that triggers reporting or the date upon which they become aware of such change.
Reporting Companies formed prior to 2024 have until December 31, 2024 to comply with the CTA. For all Reporting Companies formed during 2024, filings are required to be submitted within ninety (90) days from the date of filing of its organizational document or charter. In 2025, new Reporting Companies will have only thirty (30) days to file their reports with FinCen.
Failure to comply with the CTA may result in civil penalties of up to $500 for each day that a violation remains uncured, fines of up to $10,000 and possible imprisonment not to exceed two years.
For more information, or if you require assistance in determining whether you are required to comply with the CTA, please contact Charlie Wilkes at (973) 705-7422 (email: email@example.com) or Holly Burke at (973) 315-5577 (email: firstname.lastname@example.org).
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