Are you ready for the Corporate Transparency Act (the “CTA”)?
The CTA was enacted in part to combat money laundering, terrorism financing and other illicit activities, by imposing “Beneficial Ownership Information Reporting” (“BOIR”) requirements for certain business entities. Failure to comply with the BOIR requirements can result in civil or criminal penalties. Civil penalties can be as much as $500 per day. Criminal penalties include imprisonment for up to two years and a fine of up to $10,000.

Who is subject to the new BOIR requirements?
Entities that meet the requirements to be a “reporting entity” and do not qualify for an exemption are required to file certain information about their “beneficial owners” and in certain circumstances their “company applicant.” A “reporting entity” can be either a “domestic reporting entity” or a “foreign reporting entity.” A “domestic reporting entity” is a corporation or limited liability company formed under U.S. laws that was created by filing a document with a secretary of state or any similar office under the law of a State or Indian Tribe. A “foreign reporting entity” is a company formed under the laws of a non-U.S. country that has registered to do business in any U.S. State or Tribal jurisdiction by filing a document with a secretary of state or similar office of the State or Tribe.

What are the deadlines for filing a BOIR?
The deadline for filing a BOIR depends on when the “reporting entity” was formed. If the “reporting entity” already existed on January 1, 2024, it must file its initial BOIR by January 1, 2025. If the “reporting entity” was created or registered to do business in the U.S. after January 1, 2024, it must file its initial BOIR with in ninety (90) days after formation.

Our next post will discuss who is a “beneficial owner” who is a “company applicant” and what information must be included with a BOIR.

If you or anyone you know has questions about the CTA, or would like assistance in filing a BOIR, please contact me at (845) 426-6156 or by email at hugh@strausjacobson.com.

Our firm, Straus Jacobson & Associates, provides expert tax and legal advice to our individual and business clients in Rockland and the rest of the New York tri-state area.