For our clients who are not familiar, on January 1, 2024, the U.S. government implemented a new reporting regime that requires limited liability companies, corporations, and other entities to file beneficial ownership information reports with the U. S. government.  The statute that went into effect is called the Corporate Transparency Act (“CTA”).  The CTA affects all existing entities as well as newly-formed entities in 2024 and thereafter.

As a result of the passage of the CTA, entities are required to electronically file beneficial ownership information reports with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).  An entity’s deadline for filing its initial CTA report is based on when it was created or registered to do business as follows:

• Entities created or registered before 2024 must file their initial CTA reports by January 1, 2025;
• Entities created or registered in 2024 must file their initial CTA reports within 90 days of creation or registration;
• Entities created or registered in 2025 or later must file their initial CTA reports within 30 days of creation or registration; and
• If there are any updates or corrections to previously reported information, updated or corrected reports must be filed within 30 days.

Although not an exhaustive list, some important points from the new CTA include:

• The requirements will apply to privately held LLC’s, corporations and other entities formed or registered to do business in the United States (or with any American Indian tribe) for any purpose, including for estate, investment, real estate, tax, privacy or other personal planning;
• Exemptions exist for certain highly regulated entities or other “low-risk entities” such as large operating companies and tax-exempt organizations;
• It is possible that some estate planning trusts may be required to report the information on the beneficial owners, i.e. settlors, beneficiaries, trustees, etc., if the trust directly or indirectly owns an interest in an entity qualifying as a reporting company;
• The information reported to FinCEN will be accessible to authorized government entities but will not be publicly accessible; and
• The failure to report or reporting false information may result in civil and criminal penalties.

If you choose not to prepare and submit your own filing or your accountants and business managers are also not preparing and filing the CTA reports for you, there are third-party service providers that can assist in reporting the information to the government.  We are happy to answer any questions you may have on the requirements and process but we are unable to prepare or perform the actual filing for you.  More information on the CTA may be found at U.S. Beneficial Ownership Information Registry Now Accepting Reports | U.S. Department of the Treasury, and the website for filing the necessary report can be found here.

Please contact your Wanger Jones Helsley attorney if you have any questions or concerns.