1. The Corporate Transparency Act requires certain business entities to file reports with the Department of the Treasury regarding the personal information of their owners.
2. The information will not be public, but FinCen is authorized to disclose it under certain circumstances.
3. Failure to comply with the law may result in significant monetary penalties and jail time for responsible individuals.
4. Reporting companies, unless exempt, must file information about the company, its beneficial owners, and their company applicants.
5. A beneficial owner is an individual who directly or indirectly exercises control over the entity or owns/controls at least 25% of the ownership interests.
6. Company applicants are individuals who file the application to form or register a reporting company. 1. A pre-existing Reporting Company’s first report is due by January 1, 2025.
2. Reporting Companies formed in different years have different deadlines for their first report.
3. The Corporate Transparency Act includes 23 exemptions for certain types of entities.
4. Exempt entities include those with at least 21 employees and $5M in gross receipts, certain non-operating entities, certain financial entities, and certain nonprofits and trusts.
5. Reporting Companies that don’t qualify for an exemption must disclose their legal name, trade names, address, formation jurisdiction, employer identification number, and information about Beneficial Owners and Company Applicants.
6. Updates to a Reporting Company’s information must be submitted within 30 days of the change.
https://www.balch.com/insights/publications/2024/01/corporate-transactions-act-6-q-and-a
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