Hey, I’m Morgan Davis, a business attorney from Raleigh, North Carolina, specializing in cannabis and wellness. Today, let’s dive into the Corporate Transparency Act and what it means for businesses like yours.
Overview of the Corporate Transparency Act
The Corporate Transparency Act, effective January 1, 2024, mandates that most U.S. entities file beneficial ownership information with the Financial Crimes Enforcement Network (FinCEN), a division of the Department of Treasury. This initiative aims to curb illicit activities like money laundering and tax evasion facilitated through opaque corporate structures.
Who Needs to File?
Almost all entities formed in the United States are required to comply, except for those falling under specific exemptions:
- Exempt Entities: Includes publicly traded companies, credit unions, nonprofits, and entities meeting the large operating company exemption criteria (e.g., over $55 million in gross profits and 20+ full-time U.S. employees).
- Reporting Entities: Businesses, LLCs, and other entities formed through state filings must report company details and beneficial ownership information.
What Information Must Be Reported?
- Company Information: Legal name, DBAs, EIN, current business address, jurisdiction of formation, and taxpayer identification number.
- Beneficial Owner Information: For each beneficial owner (anyone with 25% or more ownership interest):
- Full legal name
- Date of birth
- Current residential address
- Unique identifying number (e.g., U.S. passport or state-issued ID)
Reporting Deadlines and Compliance
- Existing Entities: Have until the end of 2024 to file.
- Newly Formed Entities: Must file within 90 days of formation in 2024, then within 30 days of subsequent filings starting January 1, 2025.
- Penalties: Non-compliance incurs steep fines ($500 per day), emphasizing the importance of timely and accurate reporting.
How We Can Help
Navigating regulatory requirements can be daunting, especially ensuring compliance with the Corporate Transparency Act. We offer assistance in:
- Filing Preparation: Gathering required information and completing online filings.
- Compliance Consulting: Ensuring all aspects of your business structure are appropriately reported to FinCEN.
- Legal Guidance: Addressing specific concerns and questions related to your business’s compliance obligations.
Conclusion
Don’t overlook your obligation to comply with the Corporate Transparency Act—it’s essential to avoid penalties and maintain regulatory adherence. If you’re unsure about your filing requirements or need assistance, reach out for a consultation. We’re here to simplify the process and support your business’s compliance efforts.
