The Corporate Transparency Act (CTA) is part of sweeping Congressional changes to anti-money laundering laws. Starting January 1, 2024, the CTA will require most small businesses and corporate entities to file a Beneficial Ownership Information Report with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

Initial reports for existing businesses (those created prior to January 1, 2024) must be filed with FinCEN by January 1, 2025. Those companies created on or after January 1, 2024, and before January 1, 2025, must file their initial reports within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier. If your company is created on or after January 1, 2025, the filing time shortens to 30 calendar days instead of 90. In addition to general information about the business, the initial Beneficial Ownership Information Report must contain identifying information about all beneficial owners of the business. Specifically, any person who either owns more than 25% of the business or any person who has substantial control over the business must provide: 1) full legal name, 2) date of birth, 3) current residential address, and 4) a personal identification document like a passport or driver’s license.

In addition to the initial report, businesses must also file an updated report within thirty days of any change in any of the information listed above. If an error in the report is discovered, businesses must file a corrective report within fifteen days of discovering the error.

Information sent to FinCEN will be kept confidential within an electronic database, and business information will not be available to the public. The database will only be accessible by FinCEN and other various law enforcement agencies.

Non-compliance can result in severe penalties, including fines up to $10,000 and jail time. To learn more about this new requirement, please visit Data entry and forms will be available from the FinCEN starting January 1, 2024. If you would like to learn more about these important requirements, please be sure to contact your business lawyer.