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ECS ARTICLES & NEWS

Important Reminder: New Reporting Requirements Under the Corporate Transparency Act






We want to remind you about a crucial update regarding the Corporate Transparency Act (CTA), which came into effect on January 1, 2024. This federal regulation mandates that certain companies report ownership information to FinCEN, the Financial Crimes Enforcement Network of the U.S. Treasury Department.


Key Requirements and Deadlines


  1. Who Must Report: The CTA requires both existing and newly formed companies to disclose detailed information about their "beneficial owners" and "company applicants" to FinCEN. This includes full legal names, dates of birth, current residential addresses, and copies of government-issued identification.

  2. FinCEN Identifier: Beneficial owners are urged to proactively submit their information to FinCEN to obtain a unique FinCEN Identifier. This identifier helps streamline future reporting obligations and safeguards personal identifiable information.

  3. Compliance Deadline: The deadline for submitting initial reports varies based on the company's formation date:

  • Companies existing before January 1, 2024, must file by January 1, 2025.  

  • Companies formed during 2024 must file within 90 days after formation.

  • Companies formed on or after January 1, 2025, must file within 30 days after formation.

  1. Consequences of Non-Compliance: Failure to comply with the CTA can result in severe penalties, including fines up to $500 per day and potential imprisonment.


Actions to Take


To ensure compliance with the CTA, we recommend the following actions:


  • Identify and verify your company's beneficial owners.

  • Promptly file initial reports with FinCEN according to the deadlines applicable to your company's formation date.

  • Encourage beneficial owners to obtain their FinCEN Identifiers promptly.

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Nancy Geary

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