The federal Corporate Transparency Act (“CTA”) for the first time will require disclosure of information about all corporations, limited liability companies and limited partnerships (unless exempt) and personal information about their beneficial owners as well as personal information about the persons who form those entities to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). This requirement is effective on January 1, 2024 for all such entities unless otherwise exempt by the regulation. Among the 23 exempted organizations are large operating companies with more than 20 employees and more than $5,000,000 in annual gross receipts or sales; certain inactive entities; and subsidiaries of exempt entities. Any reporting company created before January 1, 2024 must report the required information by January 1, 2025. Any entity that is created on or after January 1, 2024 must report the required information within 90 days of creating the entity. If any of the required information changes, other than with respect to a company applicant, the reporting company must file an updated report within 30 days of the change. Failure to report the required information or providing false or fraudulent information can result in civil penalties of up to $500/day for any violation that has not been remedied and criminal penalties of up to $10,000 and/or two years of prison. Visit www.fincen.gov for more information.
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