Edited: Court Blocks Corporate Transparency Act
Corporate Transparency Act
If you own an interest in a legal entity, you will likely need to comply with new reporting requirements, in some cases as early as January 1, 2024. In 2021, Congress enacted the Corporate Transparency Act (“CTA”), which tasked the U.S. Treasury Department with developing a system of standardized reporting for companies (including LLCs and partnerships) being formed in the U.S. and the disclosure of their beneficial ownership information. Failure to comply with these new obligations brings potential civil and criminal penalties to individual business owners.
Who Needs to Report?
The CTA requires privately owned corporations, LLCs, partnerships, and other legal entities formed by a filing with a Secretary of State (“Reporting Companies”) to disclose information about their beneficial owners and/or controlling members. Reporting is required for individuals who have “substantial control” over the company or control at least 25% of the entity. All reporting must occur through an online portal established on the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) website.
What Information Needs to Be Reported?
Reporting companies must disclose:
When to Report?
Reporting Violations
The CTA establishes penalties for failing to provide accurate and up-to-date information to FinCEN. Violators may face:
(a) civil penalties of up to $500 per day for each violation, or
(b) criminal penalties of up to $10,000 and imprisonment for up to two years.
NEXT STEPS
GLM has created and is offering a service package to complete your Beneficial Ownership information filings with the appropriate agency. Our fee for this service begins at a base price of $195.00 (including one shareholder or member) and an extra $100.00 per additional shareholder or member.
If you would like GLM to complete CTA compliance filings, please sign and date this page and send it back to us. You will also need to include:
If you own an interest in a legal entity, you will likely need to comply with new reporting requirements, in some cases as early as January 1, 2024. In 2021, Congress enacted the Corporate Transparency Act (“CTA”), which tasked the U.S. Treasury Department with developing a system of standardized reporting for companies (including LLCs and partnerships) being formed in the U.S. and the disclosure of their beneficial ownership information. Failure to comply with these new obligations brings potential civil and criminal penalties to individual business owners.
Who Needs to Report?
The CTA requires privately owned corporations, LLCs, partnerships, and other legal entities formed by a filing with a Secretary of State (“Reporting Companies”) to disclose information about their beneficial owners and/or controlling members. Reporting is required for individuals who have “substantial control” over the company or control at least 25% of the entity. All reporting must occur through an online portal established on the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) website.
What Information Needs to Be Reported?
Reporting companies must disclose:
- (a) the name of the reporting company,
- (b) any trade name or “doing business as” name,
- (c) the business street address,
- (d) the state of formation, and
- (e) the Taxpayer Identification Number (TIN) under which the reporting company reports to the IRS.
- (i) full legal name,
- (ii) date of birth,
- (iii) business (or residential) address, and
- (iv) either passport or state driver’s license number (including a scanned copy of the document).
When to Report?
- Companies formed or registered to do business in the U.S. after January 1, 2024, must report the identities of their beneficial owners within 90 days of formation.
- Companies formed before January 1, 2024, have until January 1, 2025, to report their current beneficial owners.
- Any changes to beneficial ownership after January 1, 2025, must be reported within 30 days of the change.
Reporting Violations
The CTA establishes penalties for failing to provide accurate and up-to-date information to FinCEN. Violators may face:
(a) civil penalties of up to $500 per day for each violation, or
(b) criminal penalties of up to $10,000 and imprisonment for up to two years.
NEXT STEPS
GLM has created and is offering a service package to complete your Beneficial Ownership information filings with the appropriate agency. Our fee for this service begins at a base price of $195.00 (including one shareholder or member) and an extra $100.00 per additional shareholder or member.
If you would like GLM to complete CTA compliance filings, please sign and date this page and send it back to us. You will also need to include:
- A current copy (PDF, not expired) of a government-issued identification form for each shareholder/member that owns 25% or more of the company.
RSS Feed
