As of January 1, 2024, the Corporate Transparency Act ("CTA") requires nearly all US businesses to file a report with the Financial Crimes Enforcement Network ("FinCen") disclosing certain ownership and business information.
Who does this apply to?
Nearly all US businesses, with some exceptions (accounting firms, inactive entities, tax-exempt entities, insurance companies, etc.).
When do you have to file?
If your business existed prior to January 1, 2024, you have one (1) year to file. New businesses started in 2024 will have ninety (90) days from incorporation. Once you've filed, you do not need to file again unless there is a change in the information from the initial filing (see below).
What do I have to do?
First, you have to submit certain information directly to FinCen disclosing the following information for the company.
Second, you'll have to identify the company's "beneficial owners". For businesses formed in 2024 and beyond, you'll also have to identify the company's "applicants", which means both the individual who filed the application to form the entity and the person who directed that person to file
Going forward, you'll be required to file a new report with FinCen within thirty (30) days of any change in ownership (including a change in someone's address or change in senior management).
What's the risk of non-compliance?
Companies that do not submit this information are subject to fines, penalties, and potential criminal charges. Fines are up to $500 per day, plus a criminal fine of up to $10,000 and up to two (2) years of imprisonment.
What should you do now?
Don't worry, we've got you covered. Please let us know if you would like us to handle the filing for you.
And as always, if you've got questions, you know we've got answers.
~ The W + K Team
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.