You may be subject to certain new legislation passed by Congress known as the Corporate Transparency Act (“CTA”). If you have any ownership interest or control in any existing entities (such as corporations or limited liability companies), the CTA may directly affect you. Importantly, the CTA significantly impacts applicable entities by imposing a mandatory reporting obligation upon them and assessing penalties for failure to accurately report the required information. To avoid any penalties, your applicable entities must perform their reporting obligation on or before January 1, 2025 if formed before January 1, 2024, and any applicable entities formed between January 1, 2024 and January 1, 2025 must perform their reporting obligation within 90 days of formation.
After years of preparation and analysis of the various iterations of the CTA, Beresford Booth is well prepared to assist you with all possible CTA obligations. Over the years, our firm has followed the CTA (found here and here), and our managing partner, David Tingstad, presented last month, alongside representatives from the Washington Secretary of State, on all things CTA. As such, we are well prepared to help you: 1) determine if the CTA is applicable to you; and 2) assist with any applicable CTA compliance you require, should you so choose.
What is the Corporate Transparency Act?
In short, the CTA requires certain entities, called “reporting companies”, to file a report with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”)identifying the entities’ “beneficial owners” and “company applicant”. If you have any ownership interest or control in any entities, such entities are likely a “reporting company” subject to the CTA. We would need to analyze any of your entities to determine if they are a reporting company.
Generally speaking, “beneficial owners” are the persons who ultimately own or control your entities. Additionally, the “company applicant” is the person(s) who formed your entity via filing. Critically, the foregoing definitions are mere generalities, and careful analysis is required to properly identify the entity’s beneficial owners and company applicants prior to reporting.
On or before January 1, 2025, it is likely that all your entities are obligated to provide “beneficial ownership information” regarding all their beneficial owners and company applicants to the FinCEN database. The FinCEN database opened January 1, 2024 and is currently live. Beneficial ownership information includes each beneficial owner’s and each applicant’s full legal name, date of birth, current residential or business street address, and a unique identifying number from an acceptable identification document (e.g., passport, driver’s license, or other government issued ID) or a FinCEN ID.
As mentioned above, your potential CTA compliance obligations are of critical importance. Failure to accurately report may result in a $500-per-day fine, up to a maximum of $10,000; and a willful failure to file a report when due, or an intentional filing of inaccurate information, is punishable as a felony by up to two years imprisonment. While the foregoing penalties may be nerve-wracking, careful analysis and proper compliance with the CTA should remove any such worries. We are present and prepared to assist you with your potential CTA compliance obligations.
Alert: FinCEN has been notified of recent fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act. The fraudulent correspondence may be titled “Important Compliance Notice” and asks the recipient to click on a URL or to scan a QR code. Those e-mails or letters are fraudulent. FinCEN does not send unsolicited requests. Please do not respond to these fraudulent messages, or click on any links or scan any QR codes within them.
How Do I Comply with CTA? What Are the Next Steps?
The intent of this letter is not to alarm you, but rather inform you of any of your entities’ potential upcoming obligations. Your entities are not alone in this obligation as the CTA applies to most. Should you require assistance, Beresford Booth PLLC will, upon obtaining your written consent, advise your entity regarding CTA compliance.
Thank you for your consideration on the matter. If you would like our assistance, please contact us as soon as possible so Beresford Booth can effectively advise your entity regarding CTA compliance.
Have a question?
To learn more about the Corporate Transparency Act – How It Impacts You, please contact Beresford Booth at info@beresfordlaw.com or by phone at (425) 776-410