UPDATE:  February 18, 2025 - Following the lifting of the final nationwide injunction on the BOI reporting requirement, FinCEN announced a new filing deadline of March 21, 2025, for most reporting companies.

As the end of the year approaches, businesses need to be aware of an important regulatory deadline. The Corporate Transparency Act (CTA) requires all companies formed before January 1, 2024, to comply with specific reporting requirements by January 1, 2025. This legislation is part of a broader effort to promote transparency and combat illicit financial activities.

What is the Corporate Transparency Act?

The Corporate Transparency Act was enacted to prevent money laundering, tax evasion, and other financial crimes. It mandates that corporations, limited liability companies (LLCs), and other similar entities report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). Beneficial owners are individuals who exercise substantial control over a company or own at least 25% of it.

Who Needs to Comply?

All companies that were formed or registered to do business in the U.S. before January 1, 2024, are required to submit their beneficial ownership information, unless exempt. This includes both domestic and foreign entities operating within the country. Failure to comply with these requirements can result in significant penalties.

Key Information to Report

• Beneficial Owner Identification: Names, birth dates, addresses, and a government-issued identification number for each beneficial owner.

• Company Information: The entity's legal name, any trade names, and its address.

Upcoming Deadline: January 1, 2025

The looming deadline of January 1, 2025, is critical for all companies formed before January 1, 2024. By this date, these entities must file their initial reports with FinCEN. Those who fail to meet this deadline can face fines and legal consequences. It is therefore imperative for businesses to start gathering the necessary information as soon as possible to ensure timely compliance. Failure to comply may result in a $500 fine per day (up to a maximum of $10,000) and impose criminal penalties to those who fail to comply.

Steps to Ensure Compliance

To help businesses navigate this new requirement, here are some steps to follow:

• Identify Beneficial Owners: Review company records to determine who meets the criteria of a beneficial owner.

• Gather Required Information: Collect the necessary personal and identification details of every beneficial owner.

• File with FinCEN: Ensure that the gathered information is correctly filed with the Financial Crimes Enforcement Network before the deadline.

Staying ahead of regulatory requirements like the Corporate Transparency Act is crucial for maintaining good standing and avoiding penalties. Businesses should not delay in taking the necessary steps to comply with this important legislation...