"Corporate Transparency Act: What Companies Need to Know and How to Comply"

Effective January 1, 2024, the Corporate Transparency Act and its corresponding regulations (the “CTA”) requires certain entities created or registered to do business in the United States to disclose certain company information to the Financial Crimes Enforcement Network, a bureau of the United States Department of Treasury. This information, referred to as Beneficial Ownership Information, must be filed online at the Financial Crimes Enforcement Network website.

Companies that are required to report are referred to as “Reporting Companies.” Generally, all companies are Reporting Companies unless they fit into one of the 23 exemptions provided by the CTA. The report requires certain information about the Reporting Company and its Beneficial Owners, as defined by the CTA.

For Reporting Companies formed prior to January 1, 2024, the report must be filed before January 1, 2025. For Reporting Companies formed in 2024, the report must be filed within 90 days of the Reporting Company receiving notice of its formation. Reporting Companies formed after 2024 will have 30 days from the Reporting Company receiving notice of its formation to file the report.

The report is only required to be filed one time. However, if there is any change to the required information, an updated report must be filed within 30 days of such change. These changes include, but are not limited to, the name of the company (including a new trade name), a change in Beneficial Owners, a change to a Beneficial Owner’s name, address, or unique identifying number (including a change to their driver’s license or other identifying document, in which case the Reporting Company will need to upload a new image of the identifying document).

A person who willfully violates the reporting requirements may be subject to civil penalties of up to $500 per day for each day the violation continues. They also may be subject to criminal penalties of up to two years in prison and a fine of up to $10,000.

If you need assistance determining whether your entity is a Reporting Company, who its Beneficial Owners are, or filing the report, the attorneys at Erickson Sederstrom can assist you in complying with these new federal requirements.