Have You Filed Your Beneficial Ownership Information Reports?

By Elidia C. Dostal, Partner

By now, you should be very familiar with the Corporate Transparency Act (CTA) and what it means for your business. As a reminder, the CTA went into effect on January 1, 2024, as part of the Anti-Money Laundering Act of 2020. This new law was enacted to increase transparency in corporate ownership by mandating certain companies disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Department of the Treasury.?

As part of the CTA, virtually all small business entities (with limited exceptions) formed prior to January 1, 2024 are required to submit beneficial ownership information reports by January 1, 2025. And for businesses formed in 2024, the forms MUST be submitted within 90 days after the formation date. If companies do not comply with the CTA requirements and submit their beneficial ownership information reports, they could face significant penalties, including civil and criminal prosecution.?

As stated under 31 U.S.C. Section 5336(h)(3) of the Corporate Transparency Act, if you do not file your beneficial ownership information reports, you may face deep financial penalties of up to $500 per day. Additionally, failure to report accurate and timely information or providing false information can result in fines of up to $10,000 and prison time for up to two years.

The CTA requirements are new, uncharted waters and affect nearly all businesses. Do not ignore the requirement or wait until it’s too late to make sure your company is compliant. It’s best to work with an experienced business attorney who can ensure your company is protected and adheres to the new law and requirements are fulfilled.?

Elidia C. Dostal is a business transactional and compliance attorney and partner with Vanst Law LLC. She serves business clients who understand the importance of involving an attorney at the front end of business transactions and compliance issues to avoid the high cost of litigation or regulatory fines. Elidia brings an expert understanding of the importance of thinking ahead to avoid potential future liabilities.