Navigating filing requirements can be a challenge. Smart CTA Filings can help ensure your business meets its filing obligations and avoids penalties. Our experienced team will handle all the research and filings for you, keeping you compliant and focused on what matters most.
On January 1, 2024, the Corporate Transparency Act (CTA) came into effect. This act requires most businesses in the United States to file with FinCEN, the US Department of Treasury’s Financial Crimes Enforcement Network.
The Corporate Transparency Act (CTA) affects a wide range of businesses in the US, including many small businesses that may not have filed federal reports before. Under the CTA, these businesses will need to submit beneficial ownership information (BOI) and other details to FinCEN.
It’s important to note that failing to comply with the CTA can result in significant fines. These can reach up to $500 per day, with a maximum of $10,000.
The CTA includes exemptions for certain businesses, such as those that already file similar reports, have a specific annual revenue threshold, operate in exempt industries, or are inactive.
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Beneficial ownership information refers to identifying information about the individuals who directly or indirectly own or control a company.
In 2021, Congress passed the Corporate Transparency Act on a bipartisan basis. This law creates a new beneficial ownership information reporting requirement as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.
FinCEN will permit Federal, State, local, and Tribal officials, as well as certain foreign officials who submit a request through a U.S. Federal government agency, to obtain beneficial ownership information for authorized activities related tonational security, intelligence, and law enforcement. Financial institutions will have access to beneficial ownership information in certain circumstances, with the consent of the reporting company. Those financial institutions’ regulators will also have access to beneficial ownership information when they supervise the financial institutions.
FinCEN published the rule that will govern access to and protection of beneficial ownership information on December 22, 2023. Beneficial ownership information reported to FinCEN will be stored in a secure, non-public database using rigorous information security methods and controls typically used in the Federal government to protect non-classified yet sensitive information systems at the highest security level. FinCEN will work closely with those authorized to access beneficial ownership information to ensure that they understand their roles and responsibilities in using the reported information only for authorized purposes and handling in a way that protects its security and confidentiality.
FinCEN is engaged in a robust outreach and education campaign to raise awareness of and help reporting companies understand the new reporting requirements. That campaign involves virtual and in-person outreach events and comprehensive guidance in a variety of formats and languages, including multimedia content and the Small Entity Compliance Guide, as well as new channels of communication, including social media platforms. FinCEN is also engaging with governmental offices at the federal and state levels, small business and trade associations, and interest groups.
FinCEN will continue to provide guidance, information, and updates related to the BOI reporting requirements on its BOI webpage, www.fincen.gov/boi. Subscribe here to receive updates via email from FinCEN about BOI reporting obligations.
