Corporate Transparency Act – Reporting Requirements effective January 1, 2024 

Companies required to report are called reporting companies. There are two types of reporting companies: 

1. Domestic reporting companies are corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.
2. Foreign reporting companies are entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office.

There are 23 types of entities that are exempt from the reporting requirements, which include publicly traded companies, banks and credit unions, securities brokers/dealers, public accounting forms, tax-exempt entities and certain inactive entit4es, among others.  A complete list can be found on the FinCEN website. 

A reporting company will have to report: 

1. Its legal name;
2. Any trade names, “doing business as” (d/b/a), or “trading as” (t/a) names;
3. The current street address of its principal place of business if that address is in the United States, or, for reporting companies whose principal place of business is outside the United States, the current address from which the company conducts business in the United States;
4. Its jurisdiction of formation or registration; and
5. Its Taxpayer Identification Number (or, if a foreign reporting company has not been issued a TIN, a tax identification number issued by a foreign jurisdiction and the name of the jurisdiction).

A reporting company will also have to indicate whether it is filing an initial report, or a correction or an update of a prior report.

A beneficial owner of the reporting will also have to report identifying information about the individuals who directly or indirectly own or control a company. A beneficial owner is an individual who either directly or indirectly: (1) exercises substantial control over the reporting company, or (2) owns or controls at least 25% of the reporting company’s ownership interests.

For each individual who is a beneficial owner, a reporting company will have to provide:

1. The individual’s name;
2. Date of birth;
3. Residential address; and
4. An identifying number from an acceptable identification document such as a passport or U.S. driver’s license, and the name of the issuing state or jurisdiction of identification document, as well as provide an image of the identification document used to obtain the identifying

The form to report beneficial ownership information will be available on January 1, 2024. A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025 to file its initial beneficial ownership information report.  A reporting company created or registered on or after January 1, 2024, and before January 1, 2025, will have 90 calendar days after receiving notice of the company’s creation or registration to file its initial report. Reporting companies created or registered on or after January 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports with FinCEN.

Penalties for willfully not complying with the reporting requirements can result in criminal and civil penalties of $500 per day and up to $10,000 with up to 2 years of jail time.

More information about the CTA can be found at www.aicpa-cima.com/boi or you can contact the Law Office of Edward V. Murachanian at 732-477-3030 and we will be happy to guide you through the process and advise as to whether your company is required to comply with the beneficial ownership reporting requirements. 

Date: January 02, 2024