Corporate Transparency Act

The Corporate Transparency Act (the “Act”) went into effect on January 1, 2024. The purpose of the Act is to facilitate enforcement of anti-money-laundering laws, but it affects millions of ordinary Americans who own interest in small businesses.

Unless an exemption applies, the Act requires all entities, including corporations, limited partnerships and limited liability companies, that are created by filing a document with a state's secretary of state or other state agency (the Division of Corporations in Utah) to disclose to the federal government in a Beneficial Ownership Information Report (“BOI Report”) the identity, date of birth, residential address, and a copy of a government-issued photo ID for each of their beneficial owners and company applicants. The Act defines a beneficial owner as someone who owns or controls at least 25% of the reporting company or who exercises “substantial control” over the entity. A company applicant is an individual who directly files or is primarily responsible for the filing of the document that creates or registers an entity. The BOI Report is filed with the Financial Crimes Enforcement Network (“FinCEN”), which is a bureau of the Treasury Department.

There are two dates to be aware of for purposes of complying with the Act: (i) any reporting company that was created during 2024 must file its BOI Report within 90 days after creation and (ii) any reporting company that existed prior to January 1, 2024 must file its BOI Report no later than January 1, 2025.

In addition, beginning January 1, 2024, changes to any information previously provided to FinCEN must be reported within 30 days of the change. There are stiff penalties for willfully failing to comply with the Act’s reporting requirements, including civil fines of up to $10,000 and possible criminal prosecution.

FinCEN designed its reporting interface so that reporting companies would be able to file BOI Reports on their own. Nevertheless, you may choose to engage BTJD to assist you with your reporting obligations under the Act, including identifying reporting companies and beneficial owners. However, please be aware that our ability to assist clients with their filing obligations will become more and more limited as the end of the year approaches.

NOTE: This page provides only an informational summary of the Act and should not be relied on as legal advice or a full scope of your obligations under the Act. For more information, please refer to FinCEN's website, which may be accessed via the Resources & Guidance section below.