Corporate Transparency Act

Beneficial Ownership Information

Navigating the Corporate Transparency Act

In the ever-evolving landscape of corporate regulations, staying informed is key to ensuring compliance and maintaining the integrity of your business. One such recent development is the Corporate Transparency Act (CTA) that went into effect January 1, 2024, a significant piece of legislation that aims to enhance corporate transparency and curb illicit financial activities of non-exempt reporting companies (Reporting Companies). The primary focus of the CTA is to enhance beneficial ownership disclosure and create a more transparent corporate environment. As a trusted law firm committed to serving our clients’ best interests, we believe it’s essential to keep you informed about the implications of the CTA to your company. In this blog post, we will delve into the key aspects of the Corporate Transparency Act and what it means for your Reporting Company.

Key Provisions Affecting Reporting Companies:

Reporting Companies

Reporting Companies include, but may not be limited to:

  • Corporations;
  • Limited Liability Companies;
  • other entities filed with your Secretary of State; and
  • foreign companies registered to do business in the US.

Beneficial Ownership Reporting

The CTA requires Reporting Companies to disclose information about the reporting company and their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). Beneficial owners are individuals who directly or indirectly own or control 25% or more of the Reporting Companies.

Reporting Companies must provide:

  • Legal Name
  • Trade Name
  • Business Address
  • Jurisdiction
  • Tax ID #

Each Beneficial Owner must provide:

  • Full Legal Name
  • Date of Birth
  • Address
  • Unique Identifying Number (you may also apply for a FinCen Number)
  • Copy of document to confirm the Unique Identifying Number

Reporting Obligations

New Reporting Companies should submit beneficial ownership information at the time of formation, while existing Reporting Companies will need to file before December 31, 2025.  New Reporting Companies formed in 2024 will have 90 days to file, while all Reporting Companies formed in 2025+ will need to file within 30 days.  You must also ensure to update information as necessary and have 30 days from any change to make amendments.

Exemptions

There are 23 types of entities that are exempt from the beneficial ownership information reposting requirements. These entities include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies.  You can find the inclusive list linked here.

Exempt reporting companies will need to keep track of their exemption status in case their qualifying information changes and they are no longer exempt. If a reporting company loses its exemption status, they will need to report beneficial owner information to FinCEN within 30 days.

Penalties for Non-Compliance:

Non-compliance with the reporting requirements of the CTA can lead to substantial penalties for Reporting Companies.  Any person found guilty of submitting false information or not producing a report at all could face fines of up to $500 per day that the violation has not been remedied, up to a total of $10,000. It is crucial for businesses to understand their obligations and meet reporting deadlines to avoid legal repercussions.

Company Applicants

Navigating the complexities of the Corporate Transparency Act may seem daunting, but we are here to guide you through the process.  Trident Legal can serve as your company applicant.  The company applicant is an individual who directly files and is primarily responsible for registering the company.

Our services include:

  • Conducting a thorough review of your Reporting Company’s structure to identify beneficial owners.
  • Assisting with the preparation and submission of accurate and timely reports to FinCEN.
  • Providing ongoing support to ensure compliance with the CTA and any future regulatory updates.

As the Corporate Transparency Act brings about a new era of corporate disclosure, it’s vital for Reporting Companies to proactively address these changes. Our law firm is dedicated to helping you understand and fulfill your obligations under the CTA, ensuring that your business remains compliant and well-positioned for success in an environment of increased transparency and accountability. If you have any questions or require assistance, please don’t hesitate to reach out.

NOTE:  Filing immediately may or may not be right for entities formed prior to 2024.  There is pending litigation which could change these requirements.

This content is for general educational purposes only and does not to provide any specific legal advice. By using this Site you understand that there is no attorney-client relationship between you and Trident Legal or Attorney Lingos.  This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your jurisdiction.