Estate Planning with Business Owners: Understanding the New Corporate Transparency Act & Beneficial Ownership Information Reporting Requirement
What is the Corporate Transparency Act (CTA) and why does it matter to business owners?
Estate Planning often involves decisions regarding issues related to businesses such as succession planning, creating new entities, and tax planning. Navigating new federal regulatory requirements can be daunting, especially when they involve detailed reporting obligations. At Deere Law Firm, we care about our business owner clients' success and are committed to keeping you informed about critical changes.
Beginning January 1, 2024, certain corporations, limited liability companies, and similar entities in the U.S. must comply with new rules that require the disclosure of beneficial ownership information to the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). This blog post outlines what you need to know to stay compliant, how to avoid potential penalties, and how the Deere Law Firm works with clients to provide guidance for compliance.
Understanding the New Beneficial Ownership Information Reporting Requirements
Beginning January 1, 2024, significant changes to the reporting requirements for corporations, limited liability companies, and similar entities created or registered to do business in the United States will take effect. These changes mandate that such entities report their beneficial ownership information to the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
Understanding the Corporate Transparency Act
The Corporate Transparency Act (CTA) is a new law that aims to combat criminal activities like money laundering, tax fraud, and terrorism. It requires certain companies, known as "Reporting Companies," to disclose information about the individuals who own and operate them. Certain companies do not have to report.
What is Beneficial Ownership Information (BOI)?
Beneficial ownership information refers to the details of the individuals who ultimately own or control a company. This information is crucial in preventing illicit activities such as money laundering and ensuring transparency within the corporate structure. Entities required to report include corporations, limited liability companies, and other similar entities, with few exceptions.
Key Deadlines to Remember
- For entities created or registered before January 1, 2024, the deadline to file the initial beneficial ownership information report is January 1, 2025.
- Entities created or registered on or after January 1, 2024, and before January 1, 2025, have 90 calendar days from the date of notice of their creation or registration to file their report.
- Those created or registered on or after January 1, 2025, must file their report within 30 calendar days of receiving notice.
Resources and Fraud Prevention
FinCEN offers a range of resources to help entities comply with these new requirements, including a Small Entity Compliance Guide, FAQs, infographics, and informative videos available at https://FinCEN.gov/BOI. Be vigilant of fraudulent attempts to solicit information. FinCEN does not send unsolicited requests, so do not click on any suspicious links or scan QR codes in unsolicited communications.
Need Assistance?
If our office assisted you in creating a business before January 1, 2024, please contact us immediately for guidance on complying with these new reporting requirements. While we are not able to take on the accept the responsibility of compliance for you, we are here to ensure your business remains compliant and to support you through this transition.
Chioma Deere, Esq.
