LAW
LAW
Understand Your Obligations Under the New Corporate Transparency Act
By Gianfranco A . Pietrafesa and Zhao Li ARCHER & GREINER , P . C .
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new federal law , the Corporate Transparency Act (“ CTA ”), becomes effective on January 1 , 2024 . The CTA will force more than 30 million privately-held companies to register with the federal government and disclose certain personal information about their owners and management . It applies to companies formed in the U . S . as well as companies formed outside the U . S . and registered to do business in the U . S . The federal government will enforce compliance with significant civil and criminal penalties on companies , senior management and owners who fail to comply with the CTA . This article summarizes a company ’ s obligations under the CTA .
Question 1 : Is Your Company Required to Report ?
The CTA requires ( 1 ) all domestic companies created by the filing of a document , and ( 2 ) all foreign companies formed under the laws of a foreign country and registered to do business in the United States , with a secretary of state ( or any similar office under the laws of a state or an Indian tribe ), to file a report with the U . S . Department of Treasury ’ s Financial Crimes Enforcement Network (“ FinCEN ”), unless exempt .
Gianfranco A . Pietrafesa , partner Archer & Greiner , P . C .
Question 2 : Is Your Company Exempt ? The CTA exempts 23 categories of companies from the requirement of filing reports ,
Zhao Li , associate Archer & Greiner , P . C .
but these companies are primarily larger , highly regulated , or subject to different ownership reporting requirements . Exempt companies include publicly-held companies , public utilities , banks and credit unions , insurance companies , accounting firms , and large operating companies .
With the implementation of the Corporate Transparency Act ( CTA ), companies must make transparency part of their core corporate guidelines .
Photo : Getty Images / iStockphoto / marekuliasz
Question 3 : What Must You Report ?
A reporting company must report its full legal name , any other names used in its business , its primary U . S . address , its state of formation or registration , and taxpayer ID number . It must also report the following beneficial ownership information (“ BOI ”) about its beneficial owners and company applicants : ( 1 ) Full legal name ; ( 2 ) date of birth ; ( 3 ) current business or residence address ; ( 4 ) unique identifying number from a non-expired ( a ) U . S . passport , ( b ) driver ’ s license , or ( c ) identification document issued by a state or local government or Indian tribe ( if an individual does not have any of the foregoing documents , a passport issued by a foreign government may be used ); and ( 5 ) an image of the identification document from which the unique identifying number was obtained .
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