Corporate Transparency Act: New requirement for most businesses beginning Jan. 1, 2024

Beginning on Jan. 1, 2024, many entities (e.g., corporations, LLCs, LPs, etc.) will be subject to a new reporting requirement that was enacted by Congress as part of the Corporate Transparency Act (CTA). The CTA creates a new beneficial ownership information reporting requirement as part of the U.S. government’s efforts to make it harder for wrongdoers to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.

If an entity does not qualify for one of several specified exemptions, it must report its beneficial ownership information to the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) electronically through a secure filing system available via FinCEN’s website. FinCEN will begin accepting beneficial ownership information reports on January 1, 2024. The due date for initial reports depends upon when the reporting entity was created. Under the current law, entities created prior to January 1, 2024, must file their initial report no later than January 1, 2025. Entities created on or after January 1, 2024, and before January 1, 2025, must file their report within 90 calendar days after the entity’s creation, and entities created on or after January 1, 2025, must file their report within 30 calendar days after the entity’s creation. Failure to timely submit a required report may result in civil and criminal penalties.

We urge you to consult with legal counsel regarding CTA compliance, and at your request, we will assist with providing counsel any requested information.

For more details on the new reporting requirement, including information on exemptions, please refer to the FAQs and FinCEN’s Small Entity Compliance Guide located at https://www.fincen.gov/boi.

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