Beginning January 1, 2024, the Corporate Transparency Act will require existing and newly formed corporations and limited liability companies to disclose additional information about the company, its owners, managers, and any attorney who assisted in the registration. This information will need to be reported online to the Financial Crimes Enforcement Network (or FinCEN) and is due within 90 days of a new entity’s formation or by January 1, 2025 for existing companies.
This is in effort by the U.S. Treasury Department to prevent the increase in financial crimes, such as money laundering, illicit uses of anonymous entities, and terrorist financing. This database will not be publicly available but may be accessed by various government agencies.
The identity of any individual who exercises “substantial control”, owns and/or benefits by at least 25% of the reporting company must be provided to FinCEN and include:
· full legal name
· date of birth
· current residential or business address
· a unique identifying number from a passport or driver’s license
The U.S. Treasury is also seeking information on individual owners that either directly or indirectly own a reporting company. There are exemptions for certain entities from having to report, such as banks, nonprofits, larger corporations, and other entities that register with other government agencies.
Failure to report the required information will result in penalties of $500 per day up to a total of $10,000 and up to two years imprisonment for willful failure to provide may be imposed.
The FinCEN is in the process of setting up the online reporting system to input this information.
We will provide more information as it becomes available, however please feel free to reach out to us with any questions in the meantime.