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Corporate Transparency Act – Important New Filing Requirement for Most Business Entities
Effective as of January 1, 2024, there is a new federally-mandated, anti-money laundering requirement in place that is applicable to the organization of nearly all new corporations, limited liability companies, statutory partnerships and any other business entities that must file their organizational documents with any State (“New Entity”). Known as the “Corporate Transparency Act” (“CTA”), it imposes on you the obligation to file a Beneficial Owner Information (“BOI”) report with the Financial Crimes Enforcement Network of the US Treasury (“FinCEN”). This same filing obligation will apply to ALL such corporations, limited liability companies, statutory partnerships and any other business entities commencing January 1, 2025. Moreover, BOI Reports must be updated each time there are changes to the reported information, including, for example, changes in ownership of reporting entities. Thus, while we are focused at this moment on the filing requirements for New Entities, this law has ongoing compliance obligations that must be carefully monitored.
The BOI Report must be filed with FinCEN within thirty (30) days of the date of the state filing for the New Entity (note – this was previously 90 days).
BOI Reports are strictly confidential, and there are significant limitations on the law enforcement departments that can access them.
PLEASE NOTE: The obligation to file a BOI Report rests solely with you, the client. Katz Baskies & Wolf is not filing BOI Reports. Note further that there are meaningful penalties associated with the failure to file a BOI Report on a timely basis.
Information regarding the filing obligations and a link to actually file your BOI Report can be found at this web address: https://www.fincen.gov/boi .
In order to assist you in filing the BOI Report, and to learn more about the information you will need in order to file and what constitutes a beneficial owner, we urge you to review the FinCEN website link above as well as our memorandum about the Corporate Transparency Act here.
Any person violating the requirements of the CTA is liable for civil penalties of not more than $500 for each day the violation continues, and criminal penalties of up to two years imprisonment and fines of up to $10,000.