There is an upcoming December 31st deadline to file under the Corporate Transparency Act (“CTA”) that took effect on January 1, 2024. Failure to timely comply may result in significant penalties.
The CTA is a new federal law that applies to all LLC’s (single member and multi-member), Limited Partnerships, Corporations (C-Corps and S-Corps) and other entities formed by the filing of a formation document with a Secretary of State (“Covered Entities”) formed prior to, or after January 1, 2024.
All Covered Entities formed before January 1, 2024, must file an initial Beneficial Ownership Information (“BOI”) report with the Department of Treasury’s Financial Crimes Enforcement Network (“FinCen”) no later than December 31, 2024. (A separate filing deadline applies to Covered Entities formed after January 1, 2024.) Each BOI report must provide FinCen with information and documentation about the Covered Entity, as well as its owners, directors, officers, partners, members and/or managers. Note that Estates and Trusts may be deemed “beneficial owners” under the CTA.
There are significant penalties for failing to timely file an initial BOI report, including cash penalties of up to $10,000 and imprisonment for up to two years for willful failure to timely file.
How to comply
If your Covered Entity has reporting responsibility under the CTA:
- You can file your initial report directly by logging on to FinCen;
- We can make arrangements for you to work with our preferred outsourced service firm and then you will deal with them directly (and without our further involvement) in connection with filing your initial BOI report; or
- You can engage a law firm (including ours) to assist you with the filing of your initial BOI report. If you would like to engage Lassar & Cowhey LLP for this purpose, please email us at [email protected] and one of our team members will provide you with a mandatory questionnaire for your use for each Covered Entity, as well as information as to the required supporting documentation that you must gather. Please note, however, that if 25% or more of your Covered Entity is owned by an Estate or Trust, the process is more complicated; if that is your situation, please instead directly contact our paralegal, Osnat Arabov for further information.