Written by: Amber Ott
Amber Ott, Director of Operations, Chief Compliance Officer
At Agili, we aim to always keep clients and friends apprised of new regulatory requirements that may affect their lives but may not be top of mind for them. One such item is the Corporate Transparency Act (“CTA”).
Update
On March 1, 2024, the U.S District Court for the District of Alabama declared the CTA unconstitutional, though it’s important to note that this specific ruling only suspends enforcement of the CTA against the plaintiffs. It is likely that the ruling will be appealed and that there will be additional court cases that will decide the ultimate fate of the CTA. We suggest clients be mindful of the filing deadlines described at the end of this post and reach out to their attorneys with any questions on their own requirement to file.
What is the Corporate Transparency Act?
The CTA was passed by Congress in 2021 to enhance transparency into the ownership of certain entities in an attempt to combat money laundering, tax fraud and other illicit activities. CTA became effective on January 1, 2024. Now, certain existing and new entities must file information about their beneficial owners with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.
New Regulations for Corporations, LLCs, and More
Entities required to report are corporations, limited liability companies and any other entities created by filing a document with a secretary of state or other similar office in the United States. Importantly for our clients, this excludes trusts, as they are not formed by filing a document with a secretary of state or similar office. There are certain other exempt entities, but private LLCs formed for a specific purpose, such as holding real estate, are not exempt and, therefore, must report their beneficial owners (defined as individuals who either own or have substantial control over an entity).
Where to File Beneficial Ownership Information
Beneficial ownership information may be filed online at www.fincen.gov/boi. Information filed is not public and is not subject to the Freedom of Information Act.
Important Filing Deadlines
For reporting entities existing on January 1, 2024, the filing deadline is January 1, 2025. For reporting entities formed in the calendar year 2024, the filing deadline will be 90 days after the date of formation. For reporting entities formed on January 1, 2025 or later, the filing deadline will be 30 days after the date of formation.
If you have any questions, please contact one of Agili’s knowledgeable financial strategists.