• Current street address of its principal place of business
• Jurisdiction of formation or registration
• Taxpayer identification number
Who is considered a beneficial owner and what information is required ? Beneficial owners are any individuals with substantial control over the entity , who own at least 25 % of the entity or receive substantial benefits from its assets . The required information about each beneficial owner ( and applicants , if applicable ) includes :
• Full legal name
• Address
• Date of birth
• Form of unique identification number , such as a driver ’ s license or U . S . passport number
All information will be placed on a confidential registry maintained by the FinCEN .
When are reports due ? Existing reporting companies ( those formed before Jan . 1 , 2024 ) must report the company and its beneficial owner ( s ) information by Jan . 1 , 2025 . New reporting companies ( those formed on or after Jan . 1 , 2024 ) must report the identity of beneficial owner ( s ) and applicant ( s ) to the FinCEN within 30 days of receiving actual or public notice that the creation of registration of the reporting company is effective .
What are the penalties if I fail to comply ? Violations , including failure to report benefit ownership information or the reporting of false or fraudulent information , may lead to penalties , including :
• Civil penalties can up be to $ 500 for each day the violation continues
• Criminal penalties may include fines of up to $ 10,000 and / or imprisonment for up to two years
• Protecting Small Business Information Act of 2023 : This bill urges Congress to delay the CTA reporting requirements until all three rules under the legislation have been finalized with a concurrent effective date .
• The Treasury Department : The organization proposes giving newly formed companies more time to report ownership information , acknowledging that the pending new requirements to do so are complex and these companies need more time . The proposed rule would give companies created or registered in 2024 a 90-day period after they ’ ve formed to report ownership information . Existing companies would still have to file their initial report within the year the requirement goes into effect .
Plan Now Until the proposed legislation is passed , we encourage you to prepare now by developing internal policies and procedures to assess your reporting obligations and identify your beneficial owners and applicants . To help prepare for these new compliance rules , the FinCEN recently published a Small Entity Compliance Guide . The guide is intended to help businesses determine if they are required to report beneficial ownership information to the FinCEN , as well as what reporting is required should that be the case .
We encourage you to work with an attorney to help guide you through these new reporting requirements and determine your obligations . To obtain assistance with your CTA compliance needs , contact us today . ■
Growing Pressure to Delay Effective Date There continues to be growing concerns about the CTA ’ s effective date due to its complex rules and the anticipated time it will take for businesses to get in compliance . Some of the most recent requests for delaying the CTA ’ s start date include :
Issue 2 | 2023 VIEWpoint 5