Legal Blogs and Updates

Deadlines are fast approaching for companies to file ownership information reports required by the newly applicable federal Corporate Transparency Act (“CTA”).

The CTA requires most small corporate entities to report ownership information to the Financial Crimes Enforcement Network of the U.S. Treasury Department (“FinCEN”).  FinCEN started accepting beneficial ownership information (“BOI”) reports as of January 1, 2024. 

The CTA introduces major changes to the transparency requirements that apply to entities registered in the United States.  Given the CTA’s broad applicability and far-reaching implications, all existing (and to-be-formed) limited partnerships, corporations, limited liability companies, trusts and other associations will need to evaluate whether they are subject to its reporting requirements.

Who?

Entities required to file reports under the CTA include any company or other entity that is formed by filing a document (such as a certificate of incorporation, certificate formation, etc.) with a secretary of state (or similar authority, such as the state treasurer) unless the company meets certain limited exemption criteria. FinCEN also published a small entity compliance guide, which can be found here.

Compliance with the CTA is the responsibility of the corporate entity and its senior officers. Failure to comply can result in substantial penalties, including fines as high as $500 per day (up to $10,000), and up to two years in prison.

What?

Regardless of when they were formed, reporting entities are required to submit information about their “beneficial owners” and “company applicants” to FinCEN. Such information includes the owner’s and applicant’s full legal name, date of birth, current residential address and a copy of such individual’s passport or other governmental identification. 

When?

The deadline for filing initial reports with FinCEN depends upon the date of the entity’s formation. If the entity:

• Was formed prior to January 1, 2024, the initial report must be filed by December 31, 2024;
• Was formed during calendar year 2024, the initial report must be filed within 90 days after the date of formation; and
• Is formed on or after January 1, 2025, the initial report must be filed within 30 days after the date of formation.

All corporate entities should be taking steps to comply with the reporting requirements by the applicable deadline.

Contact Us With Questions

Please contact the Connell Foley LLP attorney you regularly work with or one of the attorneys listed below if you would like to discuss your organization’s CTA reporting requirements or have questions about the CTA in general.

• John D. Cromie
• John W. Dalo
• Noel D. Humphreys

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