New Reporting Requirements under the Corporate Transparency Act

As of January 1, 2024, certain businesses are

required to register with the U.S. Treasury Department's Financial Crimes Enforcement Network

("FinCEN") under the Corporate Transparency Act ("CTA''). A business required to report under

the CTA is referred to as a "Reporting Company." It is anticipated that over 30 million businesses

will be required to report under the CTA. In addition, the CTA requires the disclosure of certain

beneficial ownership information ("BOI") of certain entities from people who own or control such

entities.

The intent of the BOI reporting requirement is to enhance transparency and combat financial

crimes. The CTA is a part of the Bank Secrecy Act, a set of federal laws that require record-keeping

and reporting on certain types of financial transactions. Under the CTA, BOI reports will be filed

with FinCEN. Below is some information detailing the Who, What, When and How for you to

consider as you undertake this new reporting requirement.

What is the Penalty for Not Complying?

The penalties for non-compliance with the CTA are potentially severe. Any person who

provides false information or fails to comply with the reporting requirements can be liable for civil

penalties up to $500 per day that the violation continues. Violators may also be subject to criminal

penalties of up to $10,000 and imprisonment for 2 years.

What Entities are Required to Comply With the CTA's BOI Reporting Requirement?

Entities organized both inside and outside the U.S. may be subject to the CTA's reporting

requirements. Domestic companies subject to reporting include corporations, LLCs or any similar

entity created by the filing of a document with a secretary of state or any similar state office.

Foreign companies subject to reporting include corporations, LLCs or any similar entity that is

formed under the law of a foreign country and registered to do business in any state by filing a

document with a secretary of state or any similar state office. Whether domestic or foreign,

companies are subject to reporting unless they fall within one of 23 categories of exemptions from

reporting. Such reporting is done on an entity-by-entity basis (there is no aggregation concept to

allow consolidated reporting of related entities).

The site to report is listed below:

https://www.fincen.gov/boi