Introduction

The Corporate Transparency Act (“CTA”) was enacted by Congress on January 1, 2021, to establish a beneficial ownership reporting requirement for businesses such as corporations, limited liability companies, limited partnerships, and other similar entities formed or registered to do business in the United States.

The beneficial ownership reports must be filed with the US Treasury’s Financial Crimes Enforcement Network (FinCEN). Businesses formed before January 1, 2024 have up to one year to  complete the filing. Businesses formed after January 1, 2024 and before January 1, 2025 have 90 days to complete the filing. Businesses formed from January 1, 2025 forward will have up to 30 days to file a Beneficial Ownership Information (“BOI”) report.

Five Key things to know about the CTA:

1. Who must report?

▪ Most active corporations, limited liability companies, limited partnerships, and other businesses formed by filing a document with a Secretary of State’s office in the United States.

2. Who does not have to report?

▪ Publicly traded companies, banks and other financial institutions, tax-exempt nonprofits, public utilities, and some large businesses.

3. How do I report, and whose information?

▪ Reporting companies will report beneficial ownership through FinCEN’s website. There is no fee for submitting this report.

▪ A Beneficial Owner is any individual who either exercises substantial control over a company or owns or controls at least 25% of the ownership interest. If a business entity owns or controls at least 25% of a reporting company, then its Beneficial Owner(s) must also be reported.

▪ The information must be submitted by a Company Applicant. Company Applicants are individuals who, after 1/1/2024, directly submitted the formation or registration document for a company or were primarily responsible for that submission. There may be up to two Company Applicants.

4. What is reported?

▪ Company legal name and current principal place of business or street address in the U.S.

▪ Any trade name or d/b/a name used by the business.

▪ Taxpayer identification number (TIN or EIN) for business.

▪ Each Beneficial Owner’s name; birthdate; residential street address; and an identifying number with an image of an acceptable ID (e.g., driver’s license or passport).

▪ Each Company Applicant’s name; birthdate; residential street address, (applicants whose business is submitting registration documents may use their business address); and an identifying number with an image of an acceptable ID (e.g., driver’s license or passport).

5. When do I report?

▪ If your business was created or registered prior to 1/1/2024, you have until 1/1/2025 to file your initial BOI.

▪ Businesses formed after 1/1/2024 and before 1/1/2025 must report within 90 days of formation.

▪ Businesses formed after 1/1/2025 must report within 30 days.

▪ Failure to timely file a BOI is punishable with a civil penalty of up to $500/day against the company who fails to report, and Beneficial Owners who fail to report, and criminal penalties can apply.

▪ The BOI report does not at this time need to be filed annually, but does need to be re-filed anytime an update or correction is necessary.

Contact Holly McCann or Marcie Solomon for advice on any questions regarding CTA reporting requirements. We can be reached at 412.532.8355 or Contact us.

Awards

Beverly Block
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Beverly Block
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Marcie J. Solomon
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