Since becoming effective January 1, 2024, I’ve received many email alerts from accountants and attorneys announcing The Corporate Transparency Act (CTA).
What is the CTA?
The CTA is an anti-money laundering act requiring millions of small businesses (each a “Company”) to file Beneficial Ownership Information (BOI) reports for the Company, its beneficial owners, and the Company applicants with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). Until now, ownership of most U.S. Companies was generally private information, reportable only to the IRS. In December 2023, NYS passed the New York LLC Transparency Act (NYLTA), requiring disclosure of personal information about an LLC’s beneficial owners. A mechanism to comply with NYLTA will be imposed later this year.
Most CTA alerts outline the law’s key requirements, including timeframes for complying (which depend on when the Company was created), what information must be filed, and the potential civil penalties ($500-per-day fine (up to $10,000)) and criminal penalties for the willful failure to comply.
BOI reporting requirements seem reasonably straightforward, but they have a lot of people unhappy and I have concerns about the nuances of compliance, including:
For these and other reasons, compliance with CTA has quickly become a legal hot potato.
Since the legal and practical issues with compliance are like an infestation, I’ve generally advised clients formed before January 1, 2024 to wait a few months before filing, so FinCEN can “eliminate the bugs in the system.” What are your thoughts?
If you have questions about or need assistance complying with the CTA, please reach out to Aimee B. Davis Law P.C.
Aimee B. Davis Law P.C. is committed to advising its clients and resolving issues relating to the legal and business matters that are important to them. If you have any questions, please feel free to contact us at (917) 617-2243 or email aimee@aimeebdavis.com.
Aimee B. Davis Law P.C.