October 1, 2024
By: Kevin Levy and Natali Reyes
Now is the time for companies to ensure their compliance with the Corporate Transparency Act (CTA), which imposes first-of-its-kind requirements on most business entities created in, or registered to do business in, the United States. The CTA, which took effect on January 1, 2024, requires said entities to file a beneficial ownership information report (BOI Report) with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) or face steep fines.
For additional background, please review our recent insight titled “Corporate Transparency Act and the End of Hiding in the U.S.”
Filing Deadlines:
Date Entity Formed | Filing Deadline | Information Required |
Prior to January 1, 2024 | January 1, 2025 | Company Information |
January 1, 2024 – December 31, 2024 | Within 90 calendar | Applicant Information |
On or after January 1, 2025 | Within 30 calendar | Applicant Information |
Although the CTA is currently subject to a number of pending lawsuits and legislation questioning its legality and filing requirements, the reporting requirements remain in full force and effect. The government expects a rush of filings in the coming months, so entities and owners should file well before year end in order to avoid potential problems.
It is important to note the CTA includes significant penalties for individuals and entities. For instance, the willful failure to report complete or timely updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information, can result in both civil and/or criminal penalties (in excess of $500 per day and potential imprisonment for criminal violations). These penalties can be extended to include senior officers of an entity being held accountable for such failures.
Questions?
Contact GrayRobinson Business Law Section Chair Kevin Levy, Attorney Natali Reyes, or a member of the Business Law Section.