The Corporate Transparency Act (“CTA”) has requirements that go into effect January 1, 2024, and we believe it is crucial for our clients to be aware of its provisions and potential impact. The Federal Government asserts that the CTA is designed to enhance corporate transparency and address issues related to money laundering, terrorism financing, and other illicit activities.


Key Points of the Corporate Transparency Act include:

Beneficial Ownership Reporting:
1) The CTA requires certain companies to report information about their beneficial owners to the Financial Crimes Enforcement Network (“FinCEN”).
2) Beneficial owners are individuals who directly or indirectly own 25% or more of the company or exercise substantial control over its operations.
3) This filing is accomplished by preparing and filing a Beneficial Ownership Information Form by the deadline.

New Reporting Requirements:
1) Starting January 1, 2024, newly filed covered companies are required to submit beneficial ownership information to FinCEN at the time of formation (or within 30 days of filing) and update it within one year of any changes.
2) Reporting companies created after the effective date (January 1, 2024) have 30 days after receiving notice of their creation or registration to file their report. Reporting companies that are in existence on the effective date must file their initial reports within one year.
3) FinCen does not charge a fee for filing this report.

Confidentiality and Access Controls:
1) FinCEN states that they will maintain a confidential database of the reported information, accessible only by authorized government agencies for law enforcement and national security purposes.

Penalties for Non-Compliance:
1) Failure to comply with the reporting requirements may result in significant penalties, including fines and, in certain cases, imprisonment.

What You Need to Do (your action items):
Review Your Ownership Structure:
1) Assess your company’s ownership structure to identify individuals who may be considered beneficial owners under the CTA.

Stay Informed:
1) Keep an eye out for additional guidance from regulatory authorities regarding the specific reporting requirements and deadlines.

Ensure Compliance:
1) Once the regulations are issued, take proactive steps to ensure timely and accurate reporting to FinCEN.
2) Garrett, PLLC is offering a flat-fee service to consult with clients on this new law and file this form on their behalf prior to the required deadline. We require at least thirty (30) days’ notice prior to the deadline to file this report on your behalf. Please let one of our attorneys know if you would like Garrett, PLLC to file your report.

Consult with Legal Counsel:
1) If you have any questions or concerns about how the CTA may affect your business, please do not hesitate to reach out to our legal team for guidance.

Our firm is closely monitoring developments related to the Corporate Transparency Act, and we are here to assist you in navigating its requirements. Feel free to contact us with any questions or to schedule a consultation.

DISCLOSURE: This email in and of itself does not create an attorney-client relationship with Garrett, PLLC. The information provided herein is for general