The Corporate Transparency Act (CTA), effective January 1, 2024, mandates certain business entities, known as “reporting companies,” to report beneficial ownership information (BOI) to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). This centralized database aims to combat illicit financial activities such as money laundering and tax fraud.

While large employers and publicly held companies are exempt, small, privately held businesses are generally targeted. Reporting companies must ensure compliance by understanding their obligations and meeting their reporting deadlines.

Key Requirements and Deadlines

• Determine Applicability: Businesses must verify if they meet the criteria of a "reporting company."
• Exemptions: 23 exemptions exist, including large operating companies and nonprofits.
• Deadlines:
  • Created before January 1, 2024: Deadline is January 1, 2025.
  • Created after January 1, 2024: Deadline is 90 days post-creation.

Required Reporting Information

For Reporting Companies:

• Full legal name, trade name(s)
• Address and jurisdiction of formation
• IRS Taxpayer Identification Number (TIN)

For Beneficial Owners:

• Full legal name, birth date, address
• Unique ID with a document image (e.g., passport)

For Certain Company Applicants (post-January 1, 2024):

• Details of individuals filing or directing filings.

Compliance Steps

1. Assess if the CTA applies to your business.
2. Identify beneficial owners and, if required, company applicants.
3. Compile required information.
4. File reports electronically on FinCEN's website.

Noncompliance may result in daily civil penalties ($500/day) and potential criminal charges (up to $10,000 or two years imprisonment).

For further guidance, consult FinCEN's resources:

• BOI Homepage
• FAQs
• Small Entity Compliance Guide

This bulletin does not constitute legal advice. For advice, consult legal counsel.