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Website:www.mikekellycpa.com


Corporate Transparency ACT or CTA
The Corporate Transparency Act (“CTA”) was enacted January 1, 2021, as part of the National Defense Authorization Act, representing the most significant reformation of the Bank Secrecy Act and related anti–money laundering rules since the U.S. Patriot Act. The CTA is intended to address and guard against money laundering, terrorism financing, and other forms of illegal financing by mandating certain entities (primarily small and medium size businesses) to report “beneficial owner” information to the Financial Crimes Enforcement Network (“FinCEN”).

• Companies will report their beneficial ownership information to the Financial Crimes Enforcement network. FinCEN. A bureau within the Department of Treasury.
• The purpose is to stop the flow of illicit funds (such as money laundering).
• Beginning January 1st 2024 they will begin processing beneficial ownership information reports.
• The individuals reporting ultimately own or control the company, and their company applicants.
• Corporations, LLC, or any other entity created by the filing of a document with the SOS. This applies to foreign companies as well.
• Examples of non-reporting companies include sole proprietorships and certain trusts.
• List of exemptions: See next page.
• A beneficial owner is an individual who directly or indirectly controls at least 25% or more of a reporting company or exercises substantial control over a reporting company. (Senior officers, individuals who have authority to point or remove certain officers of a company, decision makers of a company, etc.
• If a reporting company was formed prior to 2024 it is only required to report its beneficial owners and not company applicants.
• If a reporting company formed on January 1, 2024 or after they are also required to report their company applicants.

• What is reported?
o Legal name, any trade name or “DBA” name
o Complete US address
o State, Tribal, or foreign jurisdiction of formation
o For a foreign reporting company: State or Tribal jurisdiction of first registration
o Taxpayer identification number (TIN)

• What is reported for beneficial owners and company applicants?
o Name of individual
o Date of birth
o address
o ID # and issuing jurisdiction of a non-expired driver’s license, U.S. Passport, or an identification document issued by a State, local government, or Indian Tribe, or foreign passport.

• FinCEN Identifier – This is a unique number you will receive from FinCEN upon request after the individual or reporting company provides certain required information to FinCEN.

• When to file
o Companies formed before 2024 must submit their information to FinCEN by January 1 2025
o Companies formed as of January 1, 2024 must report within 90 calendar days of receiving actual or public notice that the reporting company’s creation or registration is effective.
o Starting January 1st, 2025 new reporting companies will only have 30 calendar days to file.

• How to file: You must do so electronically – FinCEN will be releasing updates. You can sign up for FinCEN updates per their website at www.FinCEN.gov/boi.
• If there is a change in your initial reporting you must file an updated report within 30 days.
• Not reporting can lead to civil and criminal penalties.

Penalties for non-compliance
Penalties for willfully violating CTA reporting requirements include (1) civil penalties of up to $500 per day that a violation is not remedied, (2) a criminal fine of up to $10,000, and/or (3) imprisonment of up to two years. A safe harbor from the penalty is available to Reporting Companies that file corrected reports with FinCEN no later than 90 days after submission of an inaccurate report
(31 U.S.C. 5336(h)(3)(C)).


https://www.fincen.gov/boi-faqs

https://www.fincen.gov/boi/small-busi...