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This notice is to inform you of a federal reporting requirement that will require you to take action. Commencing on January 1, 2024, the federal Corporate Transparency Act, or CTA, will require many domestic and foreign entities with less than $5,000,000 of annual gross receipts or fewer than 20 full-time employees to file an informational statement with the federal Financial Crimes Enforcement Network, or FinCEN. Information about the entity and personal information about its “beneficial owners” and “applicants,” must be reported to FinCEN. The failure to make these filings may result in fines or penalties, including potential criminal prosecution.
For entities in existence prior to January 1, 2024, an initial filing must be completed on or before December 31, 2024. For entities formed on or after January 1, 2024, a filing must be completed within 90 days of formation. Entities subject to the CTA include, but are not limited to, corporations, S-corporations, partnerships, multi-member LLCs, and single-member LLCs.
Once an initial filing has been made, the CTA also includes an obligation to update previously submitted information that has changed, even in minor ways. In general, updates must be reported to FinCEN within 30 days of a reportable change. While the reporting is intended to be straightforward, there are a variety of factors, including the complexity of the entity’s ownership structure, that can make this process more complicated.
Kenneth Freed & Company, PC assumes no responsibility for advising you on the legal or regulatory aspects of the CTA. In addition, we will not be assuming any responsibility for submission of any reports to the FinCEN of a client’s beneficial ownership information. It should be noted that you are responsible for compliance with the CTA.
If you are unsure if the CTA applies to you, or how to comply with the CTA, please contact us and we can direct you to an appropriate professional for assistance.
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