Corporate Transparency Act Beneficial Ownership Reporting: Compliance is Compulsory
November 25, 2024 | Carole Clark Isakson
Ready.
Congress passed the Corporate Transparency Act (CTA) in 2020 as part of its initiative to crack down on illicit activities, such as money laundering, commonly associated with shell companies. Under the CTA, many entities formed or registered to do business in the United States will be required to report various information concerning their beneficial owners and decision-makers. The idea behind the law is to unmask the natural persons behind a given entity.
The Financial Crimes Enforcement Network (FinCEN), under the direction of the United States Department of the Treasury, has been tasked with preparing the regulations that will govern the beneficial ownership reporting requirement and provide for enforcement. The reporting obligations under the CTA impact hundreds of thousands of entities, including corporations, limited liability companies, and some types of partnerships. The most significant impact will be felt by small and mid-size companies and the individuals who own and operate them, who did not previously have any mandated federal reporting responsibilities.
Entities and individuals subject to these new regulations will be required to submit a beneficial ownership information report identifying each beneficial owner, decision maker, and company applicant. Be ready with your entity’s name, EIN, and copies of photo identification for each beneficial owner and operator of the entity. Note that it is free to file directly with FinCEN. Penalties for non-compliance can yet be avoided. Keep transcripts of your reporting with your other corporate records.
Entities which existed prior to January 1, 2024, and who are not exempt have until December 31, 2024, to comply with the reporting requirements. BGS will be providing filing assistance to entities that contact us by December 15, 2024.
Set.
FinCEN has posted a frequently asked questions page and makes regular updates. Visit their page to see if your entity may be exempt from filing and to answer other FAQs.
Go!
You can file your report directly here. Note that any changes to the information must be filed within 30 days at the same link. Barna, Guzy & Steffen, Ltd.’s corporate law practice group continues to closely monitor developments in this area. Please contact me, Attorney Carole Clark Isakson, if you have additional questions and would like to schedule an appointment to connect with our team. To be directed to other helpful legal services that we offer in Minnesota and Wisconsin, such as real estate law, transportation law, employment law, estate planning, litigation, personal injury, or family law, please call our front desk at (763) 780-8500.