The Corporate Transparency Act (“CTA”) is a new reporting law that goes into effect on January 1, 2024. The intent of the CTA is to combat the use of the US financial system for money laundering and other illicit activities. The law requires covered business entities to report who the Beneficial Owners of the company are. Covered companies include many LLCs, corporations, and other business structures established under state law. The law requires the company to file an initial report and to file an updated report any time there is a change to the Beneficial Owners.

The Financial Crimes Enforcement Network (“FinCEN”) is in charge of collecting the reports. They will begin accepting reports on January 1, 2024. Any existing covered businesses must report by December 31, 2024. Business entities formed in 2024 will have 90 days to file their initial report while businesses formed after that will have 30 days to file their initial report. Thereafter, updated reports must be filed within 30 days of any changes to the Beneficial Owners of the company. Failure to report can result civil penalties of $500 a day, criminal penalties up to $10,000, and/or sentencing up to two years in prison.

If you have or are a member or manager of an LLC or other business entity, we strongly encourage you to contact a legal professional to determine if you are subject to CTA and, if required, learn how to report. For additional information regarding the reporting requirements under the CTA, refer to FinCEN’s website: Beneficial Ownership Information Reporting |