What is the Corporate Transparency Act (“CTA”)?
A new law designed to combat financial crimes such as money laundering and terrorism financing. Under CTA, companies are required to provide information regarding their beneficial owners to the Financial Crimes Enforcement Network.
When will the CTA apply?
The reporting requirements under the CTA will apply starting on January 1, 2024 (“Effective Date”). Companies formed on or after the Effective Date will have 30 days to comply, and any companies formed prior to the Effective Date will have until December 31, 2024.
What companies will be affected by the CTA?
Most companies will be required to comply with the new reporting requirements (it is estimated that 35 million companies will be required to report under the CTA in 2024). The CTA will apply to corporations, limited liability companies, limited partnerships, and other entities that may be created by the filing of a document with a state. Certain types of companies will not be required to report under the CTA; for example, large operating companies, general partnerships, sole proprietorships, most trusts and certain charitable organizations will be exempt.
What are the penalties for not complying with the CTA?
Civil and criminal penalties could apply for failing to comply the requirements of the CTA.
What information will need to be reported under the CTA?
The personal information for certain beneficial owners of the company will need to be reported; for example, the owner’s name, address, date of birth, driver’s license (or other valid identification), and similar information.
Where can I go for more information?
For more information, you can visit the website for the Financial Crimes Enforcement Network located at https://www.fincen.gov/boi.
If I am an existing client of Gould Cooksey, what should I do?
If you would like the firm to assist your company in complying with CTA, please contact us. We have established a CTA work group within the firm to assist our clients in complying with CTA. We expect to be very busy with CTA compliance work in 2024, so the earlier you can contact us, the better.
