What You Need to Know About Federal Entity Reporting Obligations Under the CTA
| What is the CTA? The CTA imposes significant new reporting requirements on both domestic and foreign entities which meet the definition of “Reporting Company” under the act. A Reporting Company must report information about the company, its “Beneficial Owners,” and its “Company Applicants” to the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”). See our full CTA info sheet here. Does the CTA Apply to Your Entity? A Reporting Company is a corporation, LLC, limited partnership or similar entity formed in the U.S. through a filing with a Secretary of State or any similar office or an entity formed under the laws of a foreign jurisdiction that is registered to do business in the U.S. When is the Initial Disclosure Due? Reporting Companies formed prior to January 1, 2024 must file an initial disclosure by January 1, 2025, but such disclosures do not need to include information regarding Company Applicants. Reporting Companies formed on or after January 1, 2024, but before January 1, 2025, must file an initial disclosure within 90 days of formation of the entity (or the date the company registered to do business in a U.S. state). After January 1, 2025 the filing window reduces to 30 days. What Are the Penalties for Failure to Comply? Penalties for failure to timely file a required disclosure include a civil penalty of $500 per day for each day the violation continues. What Are the Next Steps? If you would like us to assist you in navigating the complexities associated with the CTA, including preparing/filing the initial reports for entities created prior to, or after January 1, 2024, please contact Kenneth Hall at khall@mfcounsel.com or (770) 559-5575 for more information. See our full CTA info sheet here. |
