With the Corporate Transparency Act (“CTA”) taking effect on January 1, 2024, certain businesses are now required to disclose beneficial ownership details to the federal government. The CTA mandates increased transparency in business dealings by necessitating the identification and disclosure of the beneficial owners of non-exempt businesses. If your business is not exempt from the CTA, you will be required to submit certain information that was not previously required about your business entity and any individuals identified by the law as a “beneficial owner” to the federal government. It’s imperative that your organization determines whether the CTA is applicable to your business, and you take the necessary steps to comply with these new regulations.
What is the CTA?
The CTA is a law that requires business entities it identifies as reporting companies to disclose certain information about the business and its owners to the US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”). Under the CTA, a reporting company is a corporation, limited liability company (“LLC”), or other similar entity created by filing a document with the secretary of state or a similar office under the laws of a state or Indian tribe or formed under the laws of a foreign country and registered to do business in the United States.
Does the CTA impact you?
Many business regulations apply only to large businesses, but the CTA specifically targets smaller business entities. If you own a small business, you may be subject to this act unless the business falls under one of the exemptions, which are primarily applicable to industries that are already heavily regulated. We routinely create entities that might qualify as reporting companies pursuant to the CTA.
What do you have to do to comply with the CTA?
To comply with the act, you should gather the required information for all reporting companies of which you are a beneficial owner, as well as the information for any additional beneficial owners. Entities created before January 1, 2024, must submit the required reports by January 1, 2025. A reporting company created on or after January 1, 2024 and before January 1, 2025, must file its initial report within 90 days of the entity’s creation. Entities created on or after January 1, 2025, will have 30 days to submit the reports to FinCEN.
We understand this may be a complex process for you and your business, and the Biggs Paul team is here to help our clients navigate through the review and filing process. Please feel free to call us at (316) 684-2929, or email Tyler Paul, Ryan Rising, Whitney Skinner, or Maria Valanos at mv@biggspaul.com. Staying informed and proactive in adhering to these changes is crucial to maintaining your organization’s compliance.
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Biggs Paul LLC provides value-added legal services within the context of a number of industries on a broad array of matters to entrepreneurs and privately-owned and growth-oriented business enterprises during all stages of their development.
