Get Ready: New Reporting Requirements under the Corporate Transparency Act
By Amit Patel
Effective January 1, 2024, almost every small business will be required to submit an information return to the government. A new rule under the Corporate Transparency Act of 2019 requires most companies operating in the U.S. to submit a report as to “beneficial ownership” to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). With limited exceptions, the disclosures required by the rule applies to both new and existing business entities.
“Beneficial ownership” includes any individual who, directly or indirectly, owns twenty-five percent (25.0%) or more of the ownership interest in a company. It also includes any individual who exercises substantial control over the company. “Substantial Control” includes any senior officer of the company, anyone who has authority over the appointment or removal of any senior officer or a majority of the board of directors of the company, anyone who has substantial influence over important decisions by the company, or anyone who has any other form of substantial control.
Who Needs to Report?
The rule applies to entities like:
- Limited liability companies
- Limited liability partnerships
What Information is Required?
The reporting requirements for each Beneficial Owner include:
- Full legal name
- Date of birth
- Current address
- Unique identifying number (e.g., passport or social security)
- Document image (drivers license or passport) containing the unique identifying number
When to File?
Companies created before January 1, 2024, have until January 1, 2025, to file initial reports. New companies formed after January 1 must file within 30 days of company creation. If there are changes during the year, updated reports must be filed within 30 days.
How Can We Help?
Bodker, Ramsey, Andrews, Winograd & Wildstein P.C. can help minimize your legal risk and maintain your entity’s reputation. We offer support at every step, including:
- Determining Reporting Company status
- Identifying beneficial owners
- Preparing for the Corporate Transparency Act implementation
- Training compliance and operations teams
Contact a member of our Corporate and Transactional Practice to ensure your compliance with the Corporate Transparency Act’s beneficial ownership reporting requirements.