Posted on November 1, 2023

There’s a new law in town and it’s called the Corporate Transparency Act (CTA). Beginning January 1, 2024, this new federal reporting law will require all “reporting companies” to file reports with the U.S. Department’s Financial Crimes Enforcement Network (FinCEN). This is not a filing you want to forget as failure to file by the deadline may result in penalties of $500 per day and criminal penalties of up to 2 years imprisonment and up to $10,000 in fines. It is important to note that this is not a one and done filing. Under certain circumstances, updated reports are required to be filed within 30 days.

Only “reporting companies” are required to file reports. Most businesses qualify as a reporting company if they were formed by registering with any secretary of state within the United States. It is estimated more than 33 million businesses will be impacted by the CTA. Those required to file do not include any of the 23 exempt entities.

Reporting Disclosures

All non-exempt reporting companies are required to file a Beneficial Ownership Information report (BOI) disclosing information on the company, company applicants, and beneficial owners who, directly or indirectly, exercise substantial control over or owns or controls 25% or more of the company. Under the CTA, only reporting companies formed on or after January 1, 2024 must disclose information on the company applicants who filed the articles of incorporation.

Reporting Deadlines

Initial Beneficial Ownership Information (BOI) reports have different deadlines depending on when your company was formed.

If formed before 2024, then the initial BOI report is not due until January 1, 2025.

If formed on or after January 1, 2024, then the initial report are currently due within 30 days of the company’s registration being published or approved. That could change to 90 days pending the outcome of the proposed extension.

Remember, the CTA requires ongoing reporting with updated reports submitted to FinCEN.

Updated reports are required when there has been a change in previously reported information or awareness of the inaccuracy of previously submitted information. The reports must be filed within 30 days of the change and no later than 90 days of the obligation to report, update, or correct information to avoid penalties.

The law has clear legal definitions and guidelines on who qualifies as a reporting company, beneficial owner, and company applicant. Do not make the mistake of applying dictionary definitions to the terms or you could risk reporting false information and facing the $500 per day penalties or jail. For example, beneficial owners can be individuals who own no stake in a company.

Corporate Transparency Act Compliance Training

January 1st will be here before you know it and that means the roll out of the Corporate Transparency Act and business owners scrambling to file their reports.

That doesn’t have to be you. Rather than stress over when to file, how to file, and getting confused with all the information online, sign up for the Corporate Transparency Act Walkthrough Training.

The Corporate Transparency Act Walkthrough Training is designed to take the stress out of complying with this new law and answer the questions you never knew to ask. Learn tips for data privacy and security and never missing a deadline. Plus, receive strategies that will make you glad you did not skip this training.

Learn more and register at www.complywithcta.com 

You’ll have lifetime access no matter what option you choose.

Let’s get you ready to Comply with CTA!