Navigating the Corporate Transparency Act: Essential Steps for New LLCs

Navigating the Corporate Transparency Act: Essential Steps for New LLCs

Starting a new LLC in 2024? Understanding and complying with the Corporate Transparency Act (CTA) is crucial to avoid penalties and ensure your business is legally sound.

Let’s break down what you need to know and do.

What is the Corporate Transparency Act?

The CTA, enacted to combat illicit activities (like money laundering and tax fraud), requires U.S. businesses to report detailed information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). This act enhances transparency in corporate ownership structures, bolstering national security and economic integrity.

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Initial Filing Requirements

The timeline: For a new LLC formed in 2024, submit your initial Beneficial Ownership Information (BOI) report within 30 days of formation or registration.

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Information Required

For the LLC: Provide the full legal name, trade names (if any), principal business address in the U.S., jurisdiction of formation, and federal taxpayer identification number.

For Beneficial Owners: Include full legal names, birthdates, residential or business addresses, unique identifying numbers (such as driver’s license or passport numbers), and images of these identification documents. Beneficial owners are individuals who own or control at least 25% of the LLC or exercise substantial control over it.

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Company Applicants

For LLCs formed after January 1, 2024, provide information about the company applicants (those responsible for filing the formation documents). This includes their full legal names, birthdates, addresses, and identification numbers.

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Updates and Corrections

Compliance doesn’t end with the initial filing. You must:

Update the BOI within 30 days of any changes in beneficial ownership or changes in the information of the beneficial owners.

Correct any inaccuracies in previously submitted information within 30 days of discovering the error.


Penalties for Non-Compliance

Non-compliance with the CTA can result in severe penalties:

Civil Penalties: Up to $500 per day for each day of non-compliance.

Criminal Penalties: Fines up to $10,000 and imprisonment for up to two years for willful violations.

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Practical Steps to Ensure Compliance

Gather Required Information

Collect all necessary details about your LLC, beneficial owners, and company applicants.

File the Report

Use FinCEN’s Beneficial Ownership Secure System (BOSS) to electronically file your BOI report. Ensure all information is complete and accurate.

Stay Updated

Keep track of any changes in ownership or control and update your BOI report promptly.

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Compliance with the CTA is essential for any new LLC formed in 2024. By understanding the requirements and staying diligent with your filings, you can avoid costly penalties and ensure your business operates smoothly.

For more detailed information, consult resources like FinCEN.gov and US Chamber of Commerce .

Stay proactive, stay informed, and keep your business compliant!

Reach out to us if you have questions.

Chandrea G.

Vice President Technical

2 个月

For newly formed entity's it's my understanding they have 90 days to file. Existing entity's have until 12/31/2024 to submit their CTA filings.

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Coco Dawn Kempff

Residential & Commercial Utilities review Savings Specialist,Business Development Affiliate,Real Estate & Finance since 1990

4 个月

Thank you

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Ed Forteau

Leader of the Genuine Connections Revolution | Helping Service Providers, Entrepreneurs, and Sales Professionals Build Authentic Relationships | Author of "No More Cringe” | Changing the Way We do Business on LinkedIn

4 个月

Thank you for this critical information. There's a lot to lose by not doing it right.

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