READ CAREFULLY OR LISTEN IN… This NEW Federal Reporting Law starts January 1, 2024 and carries with it a $500 per day civil fine or up to $10,000 or up to 2 years imprisonment for criminal penalties.
If you want to skip the headache of a mistake and receive training on how to comply and complete the reports for the CTA, sign up for the Corporate Transparency Act CEO Walkthrough Training. I will walk you through step-by-step and you will have access to the training until 2024. Learn more and sign up at: bit.ly/CTA2024.
On September 29, 2022, the U.S. Department of Treasury issued the final rule for the Corporate Transparency Act of 2022 (CTA).
Beginning January 1, 2024, the Corporate Transparency Act will require all reporting companies to report beneficial owners who have 25% or more control of the company, company information, and company applicants to the Financial Crimes Enforcement Network (FinCEN).
*** For convenience, you can listen (6.5 minutes) to the legal update on the Corporate Transparency Act and scroll to the bottom for the rest of the newsletter or continue reading to learn more. ***
Who must report?
All LLCs, corporations, and any entity created by filing with the Secretary of State are considered reporting companies and will be required file an initial report. Companies formed prior to January 1, 2024 will have one year to file. Companies formed on or after that date will have 30 days. Non-compliance may result in $500 per day of violation and criminal fines of up to $10,000 and up to 2 years imprisonment.
For purposes of the CTA, you are required to report unless you are a non-profit or sole proprietor. Non-profits and sole proprietors are NOT required to report. If you do not have active 501(c)3 status with the IRS, you are classified as a corporation and will be subject to the CTA reporting requirements.
Who is a beneficial owner?
A beneficial owner is any individual who, directly or indirectly, either exercises substantial control over the reporting company or owns or controls at least 25% of ownership interests in the reporting company. Even if you own less than 25% of the company, if you are a senior officer, have the power to appoint and remove officers, or have substantial influence over company decisions, you are a beneficial owner.
What information are you required to report?
For beneficial owners, you will be required to report their name, mailing addresses, social security number or identifying number (active passport or driver's license number), and additional required information.
When do I have to start filing an initial report?
January 1, 2024. For all companies in existence before that date, you will have until January 1, 2025 to file. All new companies will have 30 days after they are incorporated. If there are any changes in your ownership, corporate structure, or you lose your exemption for reporting, you will have 30 days to report the changes.
Sign up for the Corporate Transparency Act CEO Walkthrough Training. I will walk you through step-by-step and you will have access to the training until 2024. Learn more and sign up at: bit.ly/CTA2024.
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