Effective January 1, 2024, CTA Reporting Requirements Will Require Information About Company Ownership

Published: December 11, 2023

(Orlando, FL) In their article “The Corporate Transparency Act: What You Need to Know” Dean Mead attorneys Stephen R. Looney and Christopher R. D’Amico detail the January 1, 2024 information requirements “Reporting Companies” in the United States will be required to report. These companies will be required to file “Beneficial Ownership Information Reports” with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury. Required disclosure details include legal name, date of birth, and residential street address, among other information.

Shared by the authors, “Inadvertent failure to file the report results in daily fines of ‘not more than $500’ for each day that the violation persists after the due date. Willful failure to file the report results in a fine of ‘not more than $10,000’ and/or imprisonment for ‘not more than 2 years,’ with enhanced penalties when the failure is combined with other illegal activity.”

“Beneficial owners” are anyone who owns at least 25% of the entity or who exercises substantial control over the entity (such as officers, directors, managers, etc.). The following entities will not have to comply: (i) larger operating businesses (those with more than 20 employees) and (ii) highly regulated entities (e.g., banks and financial institutions, securities dealers, insurance companies, credit unions, certain tax-exempt organizations, public utilities, and publicly traded companies). Entities formed before January 1, 2024 will have to file a report with the U.S. Treasury Department no later than January 1, 2025.  For entities formed in 2024, the reports must be filed within 90 days of the date of formation of the entity. For all entities formed on or after January 1, 2025, the reports must be filed within 30 days of the date of formation of the entity.

To learn more about the reporting requirements visit: https://bit.ly/3SvWBLj.

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