An Important Update about the Corporate Transparency Act (CTA)

Woman showing client CTA papers

Dear Clients,

We hope this message finds you well. As part of our commitment to keeping you informed about relevant legal developments, we’d like to share important news regarding the Corporate Transparency Act (CTA), which came into effect on January 1, 2024.

What is the CTA?

The CTA is a federal law aimed at promoting transparency and preventing illicit financial activities. It applies to almost all corporations and limited liability companies (LLCs) operating in the United States.

Here are the key points:

  • Disclosure of beneficial owners:
    • Under the CTA, companies are now required to disclose information about their beneficial owners—individuals who ultimately own or control the company. Beneficial ownership details include names, addresses, and other relevant information.
  • Why is it important?
    • By shedding light on ownership structures, the CTA helps prevent misuse of corporate entities for money laundering, fraud, and other illicit purposes. Transparency is crucial for maintaining trust in the business community.
  • Reporting deadlines and process:
    • Companies subject to the CTA must file an initial report with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). Ongoing reports are necessary whenever there are changes in ownership information. Furthermore, reporting companies created or registered prior to January 1, 2024, have until January 1, 2025, to submit their initial Beneficial Ownership Information (BOI) report to FinCEN. Companies have 30 days to report changes to the information in their previously filed reports and must correct inaccurate information in previously filed reports within 30 days of when the company becomes aware of the inaccuracy. All BOI reports are submitted electronically to FinCEN.
  • Exemptions:
    • Some entities, such as publicly traded companies, are exempt from reporting. However, most LLCs fall under the CTA’s requirements.

If you’re unsure whether your company qualifies for an exemption, please reach out to our team.

Next steps for you:

  1. Review your ownership structure:
  • Take a moment to understand your company’s ownership and control.
  • Identify who qualifies as a beneficial owner.
  1. File the initial report:
  • Use the Beneficial Ownership Information (BOI) E-Filing System to submit your initial report if required.
  • Stay compliant by updating ownership information promptly when needed.
  1. Stay Informed:
  • For detailed guidance and official resources, visit the FinCEN website. www.fincen.gov

We appreciate your attention to this matter. Compliance with the CTA is essential, and our firm is committed to supporting you throughout this process. If you have questions or need assistance, do not hesitate to reach out to someone from our team.

Thank you for being part of our valued client community!

This is not legal advice.

Categories: 
Related Posts
  • Will Contests Read More
  • What is Parental Alienation? Read More
  • What is an Estate Plan & Why do I need one? Read More
/