Required Actions If You Have Ownership In A Business
As of January 1, 2024, the Corporate Transparency Act (CTA) took effect. The CTA requires nearly all businesses (exceptions which can be found here) to report their beneficial owners to FinCEN.
FinCEN is the Financial Crimes Enforcement Network, and the purpose of the CTA is to combat money laundering. Beneficial owners who must be reported are those who own 25% or more interest in the company or have “substantial control” of the business such as serving as a senior officer or a manager who can make important decisions regarding the business.
This is not an annual report like those you file with the Secretary of State to keep your business in active status. The beneficial ownership report must only be filed one time and then be amended if and when there are any beneficial ownership changes.
This article provides a basic overview of who falls into these specific categories.
A federal district court in Alabama ruled in March that the CTA is unconstitutional, but that ruling only affects the named individuals in the case and does not apply to any other business owners.
As of right now, all business owners, are still required to file the beneficial ownership report with FinCEN.
If your business was established prior to January 1, 2024, you have until the end of 2025 to get into compliance. If the business was established in 2024, you have 90 days from the date the business was registered with the Secretary of State. Penalties for not filing can be up to $500 per day per penalty and a $10,000 criminal penalty per entity and imprisonment for up to two years.
There are companies charging a fee to file these reports on your behalf or you can file for free here. The FinCEN website has a step-by-step filing guide to assist you through the process, and you can find the PDF version here.
As always, we are here to support your best interests. Please do not hesitate to contact our office if you have questions or would like to discuss:
E: Office@WoodinvilleLaw.com
W: www.WoodinvilleLaw.com
To Your Success,