In addition to our estate planning and elder law services, at Rebecca W. Geyer & Associates, we assist with business planning and formation…
There’s news, and, if you’re in business, you need to know about the new reporting requirements of the Corporate Transparency Act in order to avoid facing stiff government penalties.
Background
The CTA, or Corporate Transparency Act, is hardly brand-new. First proposed back in 2012, there were attempts to put the law into force in 2015 and again in.2019. In December 2020, the CTA became law as part of the National Defense Authorization Act for fiscal year 2021. From that point, after a public commentary period, the final rule was released November 20, 2023, putting CTA into effect on January 1st, 2024.
Purpose:
The underlying concept of the law is the prevention of:
- terrorist financing of U.S. businesses
- money-laundering
- Illegal business activities
Deadlines for submission of Beneficial Owner Information Reports (BOIRs):
- Companies registered before the effective date have until Jan. 1, 2025 to submit a BOIR.
- Companies established in 2024 will have up to 90 days to file a BOIR.
- Companies formed after January 1, 2025 will have 30 days to file an initial BOIR.
Entities generally exempt from filing:
- Large Operating Companies with more than 20 full-time employees and who filed a Federal income tax return for more than $5,000,000 in the U.S. for the previous year.
- Pooled investment vehicles (operated by banks, credit unions, and investment advisors.
Keep checking: Even if you fall under the exemptions, It’s important to monitor for changes.
Failing to submit the information or for submitting false information will result in very onerous financial penalties and violators might even face imprisonment.
The need for such regulation may be a sad commentary on the state of our world (an observation expressed by several of our Geyer Law business clients), but in order to protect legitimate business owners against terrorist and criminal acts, it’s important that we verify who owns and controls United States business entities.
– by Rebecca W. Geyer
