The Corporate Transparency Act (CTA) is a crucial regulation that all applicable businesses need to be aware of. The deadline for companies formed or registered before January 1, 2024, is any time before January 1, 2025.
Who Needs to File a CTA Report?
All reporting companies are required to submit this report.
Absent an exemption, a reporting company is (1) any corporation, limited liability company, or other similar entity that was created in the United States by the filing of a document with a secretary of state or similar office, or any legal entity that has been registered to do business in the United States by the filing of a document with a secretary of state or similar office. FinCen FAQs.
It's essential to review the details of the act to determine if your business falls under this category.
Understanding Beneficial Owner
A key term used in the CTA is a "beneficial owner." It refers to individuals who, directly or indirectly, owns 25% or more of the entity’s ownership interests, or who exercises substantial control over the entity.
Filing Procedure
The report must be filed with the Financial Crimes Enforcement Network (FinCEN). The process includes providing the necessary details through an online portal.
Consequences of Non-Compliance
Failure to comply with the CTA can lead to severe consequences. These may include hefty fines and potential criminal penalties. Therefore, it's crucial to ensure your business is prepared to meet these reporting requirements.
If you have questions, call Whipp Law today!
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