The Corporate Transparency Act (CTA) was signed into law on January 1, 2021. The Act expanded anti-money laundering laws and created new reporting requirements for certain companies doing business in the US. Starting in 2024, many small businesses will be required to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).
Important dates: For existing reporting companies created or registered before 2024, the initial report is due by January 1, 2025. For reporting companies created or registered in 2024, the initial report is due 90 days after the entity's creation or registration.
If there is a change to previously reported information about the reporting company or its beneficial owners, an updated report must be filed within 30 days of the change. So, it is imperative that your company implement a system to identify reportable changes and file an updated report with FinCEN in a
timely manner. The penalties for willfully failing to file both initial and updated reports are steep-$500 per day that the report is late, up to $10,000 and imprisonment for up to two years.
It's important to note that the CTA introduces legal obligations and considerations. It is strongly recommended that business owners consult with a qualified attorney who specializes in corporate law to ensure compliance with the provisions of the Corporate Transparency Act.
