Time is Ticking: The Corporate Transparency Act
On January 1, 2024, the Corporate Transparency Act (CTA) went into effect and introduced new reporting requirements for certain companies formed or registered in the United States. This new law requires any entity that meets the definition of a “Reporting Company” and does not qualify for an exemption under the CTA to file Beneficial Ownership Information (BOI) reports with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). Although certain larger and/or more heavily regulated companies may qualify for one of the 23 exemptions from the reporting requirements, many smaller entities will be required to report.
A company considered a “Reporting Company” is required to file a BOI report. The next step is to identify its “Beneficial Owners.” Beneficial Owners are determined based on either an individual’s ownership interest or the extent of control exercised over the Reporting Company. Given the complexities of the CTA, we recommend companies consult with their legal advisors to determine whether a particular company meets the definition of a Reporting Company and who within the company is deemed to be a “beneficial owner” for reporting purposes.
Notably, Reporting Companies created on or after January 1, 2024, must submit BOI Reports with FinCEN within 90 days of receiving actual or public notice that the company has been formed/registered. For instance, the reporting deadline for entities formed in January 2024 will fall within April 2024, depending on the specific formation date. In addition, Reporting Companies created on or after January 1, 2024, are required to submit information about the individuals who formed the company (company applicants).
Reporting Companies created or registered to do business in the United States before January 1, 2024, have additional time to file initial BOI reports and are not required to do so until January 1, 2025.
There are civil and criminal penalties for willful violations of the CTA, so companies should begin assessing whether they are subject to the CTA and, therefore, required to submit BOI Reports to FinCEN. Scopelitis attorneys are available to assist businesses in complying with these new requirements. Contact Scopelitis’ Corporate Structuring & Strategy Practice with questions.
News from Scopelitis is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.
Time is Ticking: The Corporate Transparency Act
On January 1, 2024, the Corporate Transparency Act (CTA) went into effect and introduced new reporting requirements for certain companies formed or registered in the United States. This new law requires any entity that meets the definition of a “Reporting Company” and does not qualify for an exemption under the CTA to file Beneficial Ownership Information (BOI) reports with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). Although certain larger and/or more heavily regulated companies may qualify for one of the 23 exemptions from the reporting requirements, many smaller entities will be required to report.
A company considered a “Reporting Company” is required to file a BOI report. The next step is to identify its “Beneficial Owners.” Beneficial Owners are determined based on either an individual’s ownership interest or the extent of control exercised over the Reporting Company. Given the complexities of the CTA, we recommend companies consult with their legal advisors to determine whether a particular company meets the definition of a Reporting Company and who within the company is deemed to be a “beneficial owner” for reporting purposes.
Notably, Reporting Companies created on or after January 1, 2024, must submit BOI Reports with FinCEN within 90 days of receiving actual or public notice that the company has been formed/registered. For instance, the reporting deadline for entities formed in January 2024 will fall within April 2024, depending on the specific formation date. In addition, Reporting Companies created on or after January 1, 2024, are required to submit information about the individuals who formed the company (company applicants).
Reporting Companies created or registered to do business in the United States before January 1, 2024, have additional time to file initial BOI reports and are not required to do so until January 1, 2025.
There are civil and criminal penalties for willful violations of the CTA, so companies should begin assessing whether they are subject to the CTA and, therefore, required to submit BOI Reports to FinCEN. Scopelitis attorneys are available to assist businesses in complying with these new requirements. Contact Scopelitis’ Corporate Structuring & Strategy Practice with questions.
News from Scopelitis is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.