Corporate Transparency Act (CTA) goes into effect Jan 1, 2024.

This law aims to combat illicit activities like money laundering, tax fraud, and terrorism funding. Businesses are mandated to report identifying information about who directly or indirectly owns/controls the company to the US Treasury Department.

Tax Law

Stay compliant to avoid penalties and jail time

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Companies required to report beneficial ownership information to FinCEN are referred to as reporting companies. There are two types: domestic and foreign. Domestic reporting companies are corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States. Foreign reporting companies are entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office.

Companies will file beneficial ownership information (BOI) reports electronically through a secure filing system available via FinCEN’s BOI E-Filing website (https://boiefiling.fincen.gov). There is no charge to use this service. To be compliant, companies must file their initial BOI Reports by the following deadlines:

  • Companies created/registered before January 1, 2024 will have until January 1, 2025 to file.
  • Companies created/registered within 2024 will have 90 calendar days from actual or public notice that its creation/registration is effective to file, whichever is earlier.
  • Companies registered on or after Jan. 1, 2025 will have 30 calendar days from actual or public notice that its creation/registration is effective to file.
Stay on top of these deadlines to ensure compliance and transparency. To be exact, willful violators of the reporting requirements may be subject to civil penalties of up to $500 per day, and criminal penalties of up to 2 years in jail and a fine of up to $10,000.