The Corporate Transparency Act, which was passed by Congress in 2021, creates a new beneficial ownership information reporting requirement. With limited exceptions, most corporations, limited liability companies, limited partnerships and other entities formed before January 1, 2024 are required to file a report with the United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN) by January 1, 2025. Those applicable entities formed during 2024 have ninety (90) days after formation to file this report and those applicable entities formed after 2024 have only thirty (30) days after formation to file this report.
Among other things, each applicable entity is required to report information pertaining to its “beneficial owners”. Beneficial owners are individuals who either directly or indirectly:
- Exercise substantial control over the applicable entity; or
- Own or control at least twenty-five percent (25%) of an applicable entity’s ownership interests.
Additionally, if there is a subsequent change in the identity of the entity’s beneficial owners or in any of the information originally reported about the entity or its beneficial owners, an updated report is required to be filed with FinCEN within thirty (30) days of the change.
If you have not yet filed this report for any of your applicable entities, we recommend that you do so as soon as possible. There are substantial penalties for filing late.
If you would like further information regarding the Beneficial Ownership Interest Reporting, feel free to contact Vanarelli & Li, LLC.