Important New Filing Requirement for Entity involvement

As your Financial Advisor, we would like to keep you informed about new federal requirements that may affect your financial well-being, particularly if you hold a beneficial ownership in entities. One such requirement stems from the Corporate Transparency Act (CTA), a new federal law designed to increase transparency in financial dealings and combat illicit financial activities by requiring certain entities to report to the Financial Crimes Enforcement Network (FinCEN).

What You Need to Know:

Who Must Report: If you own or have control in limited liability companies (LLCs), corporations (C or S), limited partnerships (LPs), or other closely held entities, you may be required to file. The CTA mandates that “reporting companies” file beneficial owner reports. Exceptions do exist (for details, visit FinCEN’s FAQ page), but in most cases, owners with substantial control or 25% or more ownership stake in these entities will need to comply.

Key Filing Deadlines:

Existing entities must file by January 1, 2025. New entities formed after January 1, 2025, must file within 30 days. Entities created between January 1, 2024, and January 1, 2025, have 90 days from the date of formation to comply. Penalties for Non-Compliance: Failure to comply with the CTA’s requirements comes with significant penalties, including: Civil penalties of $591 per day and criminal penalties up to $10,000 and potential imprisonment of up to two years. What Information is Required: Beneficial owners must provide details such as their name, address, date of birth, and upload a copy of their U.S. passport or state-issued driver’s license to https://fincen.gov/boi .

Why This Matters to You:

As your Advisor, we recommend taking this seriously, especially if you are involved in entities that fall under the CTA’s purview. The CTA is a complex legal act that has many nuances. If you have a simple entity, you may just need to file with FinCen which should take less than 10 minutes. However, ignoring these requirements could result in steep penalties, and we want to ensure your compliance. While we cannot directly assist with the filing process as would be deemed unauthorized practice of law, we recommend consulting your CPA or attorney for guidance to navigate these complexities.

For more information, you can visit the FinCEN website: https://fincen.gov/boi .