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Our attorneys stay on top of changes in legislation, agency regulations, case law, and industry trends—then craft timely legal alerts to keep clients up to date on legal developments important to their business.

December 27, 2023

Beneficial Ownership Reporting Requirements Under CTA Effective January 1, 2024

Beginning January 1, 2024, new corporate reporting obligations under the Corporate Transparency Act (CTA) will take effect. 

As outlined in our prior reports, corporations, limited liability companies (LLCs), and other qualifying entities not subject to any additional beneficial ownership reporting (reporting companies) must submit beneficial ownership and company information to the Financial Crimes Enforcement Network (FinCEN). 

The CTA defines a beneficial owner as an individual meeting at least one of two criteria: (i) either exercising “substantial control” over the reporting company or (ii) owning or controlling at least 25 percent of the ownership interest in the reporting company. Certain individuals are exempt from the definition of beneficial ownership and, as such, need not comply with the following reporting requirements.  

For corporate entities formed after January 1, 2024, and before January 1, 2025:

  1. A reporting company must file its initial Beneficial Ownership Interest (BOI) report within 90 calendar days after its formation.
  2. Please note that this 90-calendar day deadline runs from when the company receives actual notice of effective formation or after a secretary of state or similar office first provides public notice of its formation, whichever is earlier. 

For corporate entities formed before January 1, 2024: 

  1. A reporting company must file its initial BOI report before January 1, 2025.

For corporate entities formed on or after January 1, 2025:

  1. A reporting company must file its initial BOI report within 30 calendar days after receipt of actual or public notice of entity creation or registration.

In submitting its initial BOI report, a reporting company is obligated to disclose identifying information, including: 

  • Its legal name
  •  Any trade names 
  • The principal place of business 
  • Jurisdiction(s) of registration 
  • The Taxpayer Identification Number (TIN) affiliated with the entity

Additionally, details about the beneficial owner must be provided, such as the individual’s name, date of birth, address, and prescribed identification. This submission ensures an accurate representation of the reporting company and its beneficial owner in the context of the BOI report.

Any changes to information in a BOI report regarding the company or beneficial owner must be updated within 30 days of the date of the change. Reporting companies should remain cognizant of applicable reporting dates and diligently prepare submissions to FinCEN as required. FinCEN advises that individuals who fail to fulfill reporting obligations may face civil or criminal penalties.
 
Attorneys in Barclay Damon’s Corporate Practice Area continue to monitor CTA guidance.

If you have any questions regarding the content of this alert, please contact Jim Canfield, Corporate Practice Area co-chair, at jcanfield@barclaydamon.com; Karina Shahine, associate, at kshahine@barclaydamon.com; Danielle Katz, associate, at dkatz@barclaydamon.com; or another member of the firm’s Corporate Practice Area.
 

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