Be in the know! The latest Corporate Transparency Act (CTA) which was implemented this year may be affecting your Corporation. The Corporate Transparency Act (CTA) is a bipartisan law passed by U.S. Congress requiring certain
entities in the United States to disclose specific identifying information on the Beneficial Ownership of these required entities. FinCen, the Financial Crimes Enforcement Network (which is a part of the US Treasury Department) implemented this new requirement on January 1, 2024, in order to battle money laundering tactics. FinCen created a non-public database that will maintain this Beneficial
Ownership information. It is our understanding that access to this information can be provided to certain law enforcement agencies for use in civil and criminal investigations, certain foreign law enforcement agencies, financial institutions for compliance purposes, and other federal agencies. As a general rule, the Beneficial Owner is an individual who controls at least 25% of ownership interest in said company, an individual who directly or indirectly exercises substantial control over the company. The Beneficial Owner can also include senior officers such as President, CFO, CEO, etc. If you are unsure as to who applies to this rule, we recommend you contact our office to ensure appropriate reporting is done. This requirement will apply to: – Any entity formed by filing a formation document (Limited Liability Company, Corporation, Sole Proprietorship, Limited Partnerships, LLP’s, Statutory Trusts, etc.) with the Secretary of State office or similar agency.
– Any entity registered as a foreign company or similar organization by way of filing with the Secretary of State office or similar agency. Not only are the companies required to disclose their Beneficial Owners’ information, but Reporting
Companies must also disclose certain identifying information. There are a total of 23 categories of exemptions. Some examples are – Tax-exempt entities under Section 501(c) of the Internal Revenue Code (IRC.) This does not include other sections under this code such as homeowner associations. – Publicly traded companies; – Banks and credit unions; – Bank holding companies; – Large operating companies with more than $5 million in annual gross
receipts and more than 20 full time employees. The annual gross receipts amount must be on the most recent tax return. – Security Exchange Act entities; -Venture Capital Fund advisers; – Insurance Companies; – Tax exempt entities; etc.
If you are unsure whether your company falls under this requirement, contact our office to ensure ompliance. For non-compliance, fines will be imposed ranging from penalty fees up to $10,000 to criminal liability of senior officers for falsifying information for up to 2 years in prison. Finley Bologna International can assist you with these filings. We are at your service, contact us.