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The Corporate Transparency Act

The Corporate Transparency Act (“CTA”) represents the most significant reformation of the Bank Secrecy Act (“BSA”) and related anti-money laundering (“AML”) rules since the U.S. Patriot Act.  The CTA was passed after pressure from other developed countries to conform to financial transparency standards. The U.S. currently does not have a centralized or complete store of information about who owns and operates legal entities within the U.S.  After much media attention, there was overall frustration by both domestic and international law enforcement agencies being able to access beneficial owner information (“BOI”). In applying the CTA, corporations, limited liability companies, partnerships and indirectly trusts, must disclose information on their “Beneficial Owners” to prevent use of shell companies from evading AML rules or hiding other illegal activities.  The CTA reporting requirements cast a broad net and can be onerous. The CTA impacts owners, as well as practitioners who advise on, and carry out, entity formation, governance, planning and tax compliance.  Final regulations have an effective date of January 1, 2024 but reporting is not required until a later date. 

            The CTA requires “Reporting Companies” to disclose specific information regarding their “Beneficial Owners” and “Company Applicants” to the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”).  A domestic Reporting Company is a corporation, limited liability company or other similar entity created by the filing of a document pursuant to the laws of a U.S. state or Indian tribe.  A foreign Reporting Company is a corporation, limited liability company or other similar entity that is formed under the laws of a foreign country, and registered to do business in any State or tribal jurisdiction by the filing of a document with the Secretary of State or any similar office under the laws of a State or Indian tribe. 

The CTA reporting requirements generally exempt entities that are otherwise subject to significant regulatory regimes where Congress presumably expected regulators to have visibility into the identities of the owners and ownership structures of the entities.  The exemptions thus avoid imposing duplicative requirements in these cases.  Exemptions to the Reporting Company requirements include, but are not limited to:

·         banks and bank-type entities;

·         tax-exempt entities;

·         accounting firms registered under the Sarbanes-Oxley Act;

·         publicly traded companies;

·         large operating companies employing more than 20 employees in the U.S. with gross receipts or sales over $5,000,000 and a physical presence in the U.S.;

·         subsidiaries of an exempt entity; and

·         certain inactive entities in existence before January 1, 2020. 

            The Beneficial Owner for purposes of the CTA reporting requirements is any individual who directly or indirectly, through any contract, arrangement, understanding or relationship, exercises substantial control over a Reporting Company, or owns at least 25% of the Reporting Company, or controls ownership of at least 25% of the Reporting Company.

            Substantial control over a Reporting Company includes service as a senior officer of a Reporting Company; authority over the appointment or removal of any senior officer or a majority of the board of directors of a Reporting Company; and direction, determination, and substantial influence over important decisions of a Reporting Company.

            The information required to be reported under the CTA includes a list of the Beneficial Owners and applicants which include the legal name, date of birth, residential address, business address and a unique identifying number from an acceptable identification document (e.g. unexpired passport number).  A Reporting Company must include its name, business address, jurisdiction of formation and unique identification number.  The due date for the CTA reports is currently set for January 1, 2025 for Reporting Companies in existence before January 1, 2024. 

            The penalties for violating the CTA can be harsh and include willfully providing or attempting to provide false or fraudulent beneficial ownership information; or willfully failing to report, complete or update beneficial ownership information.  The possible penalties include a fine of up to $500 per day up to a maximum of $10,000, plus possible imprisonment of up to two (2) years.

If you have any questions about the CTA and the reporting requirements thereunder, please do not hesitate to contact me.  

The Corporate Transparency Act

The Corporate Transparency Act (“CTA”) represents the most significant reformation of the Bank Secrecy Act (“BSA”) and related anti-money laundering (“AML”) rules since the U.S. Patriot Act.  The CTA was passed after pressure from other developed countries to conform to financial transparency standards. The U.S. currently does not have a centralized or complete store of information about who owns and operates legal entities within the U.S.  After much media attention, there was overall frustration by both domestic and international law enforcement agencies being able to access beneficial owner information (“BOI”). In applying the CTA, corporations, limited liability companies, partnerships and indirectly trusts, must disclose information on their “Beneficial Owners” to prevent use of shell companies from evading AML rules or hiding other illegal activities.  The CTA reporting requirements cast a broad net and can be onerous. The CTA impacts owners, as well as practitioners who advise on, and carry out, entity formation, governance, planning and tax compliance.  Final regulations have an effective date of January 1, 2024 but reporting is not required until a later date. 

            The CTA requires “Reporting Companies” to disclose specific information regarding their “Beneficial Owners” and “Company Applicants” to the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”).  A domestic Reporting Company is a corporation, limited liability company or other similar entity created by the filing of a document pursuant to the laws of a U.S. state or Indian tribe.  A foreign Reporting Company is a corporation, limited liability company or other similar entity that is formed under the laws of a foreign country, and registered to do business in any State or tribal jurisdiction by the filing of a document with the Secretary of State or any similar office under the laws of a State or Indian tribe. 

The CTA reporting requirements generally exempt entities that are otherwise subject to significant regulatory regimes where Congress presumably expected regulators to have visibility into the identities of the owners and ownership structures of the entities.  The exemptions thus avoid imposing duplicative requirements in these cases.  Exemptions to the Reporting Company requirements include, but are not limited to:

·         banks and bank-type entities;

·         tax-exempt entities;

·         accounting firms registered under the Sarbanes-Oxley Act;

·         publicly traded companies;

·         large operating companies employing more than 20 employees in the U.S. with gross receipts or sales over $5,000,000 and a physical presence in the U.S.;

·         subsidiaries of an exempt entity; and

·         certain inactive entities in existence before January 1, 2020. 

            The Beneficial Owner for purposes of the CTA reporting requirements is any individual who directly or indirectly, through any contract, arrangement, understanding or relationship, exercises substantial control over a Reporting Company, or owns at least 25% of the Reporting Company, or controls ownership of at least 25% of the Reporting Company.

            Substantial control over a Reporting Company includes service as a senior officer of a Reporting Company; authority over the appointment or removal of any senior officer or a majority of the board of directors of a Reporting Company; and direction, determination, and substantial influence over important decisions of a Reporting Company.

            The information required to be reported under the CTA includes a list of the Beneficial Owners and applicants which include the legal name, date of birth, residential address, business address and a unique identifying number from an acceptable identification document (e.g. unexpired passport number).  A Reporting Company must include its name, business address, jurisdiction of formation and unique identification number.  The due date for the CTA reports is currently set for January 1, 2025 for Reporting Companies in existence before January 1, 2024. 

            The penalties for violating the CTA can be harsh and include willfully providing or attempting to provide false or fraudulent beneficial ownership information; or willfully failing to report, complete or update beneficial ownership information.  The possible penalties include a fine of up to $500 per day up to a maximum of $10,000, plus possible imprisonment of up to two (2) years.

If you have any questions about the CTA and the reporting requirements thereunder, please do not hesitate to contact me.  

The Corporate Transparency Act

The Corporate Transparency Act (“CTA”) represents the most significant reformation of the Bank Secrecy Act (“BSA”) and related anti-money laundering (“AML”) rules since the U.S. Patriot Act.  The CTA was passed after pressure from other developed countries to conform to financial transparency standards. The U.S. currently does not have a centralized or complete store of information about who owns and operates legal entities within the U.S.  After much media attention, there was overall frustration by both domestic and international law enforcement agencies being able to access beneficial owner information (“BOI”). In applying the CTA, corporations, limited liability companies, partnerships and indirectly trusts, must disclose information on their “Beneficial Owners” to prevent use of shell companies from evading AML rules or hiding other illegal activities.  The CTA reporting requirements cast a broad net and can be onerous. The CTA impacts owners, as well as practitioners who advise on, and carry out, entity formation, governance, planning and tax compliance.  Final regulations have an effective date of January 1, 2024 but reporting is not required until a later date. 

            The CTA requires “Reporting Companies” to disclose specific information regarding their “Beneficial Owners” and “Company Applicants” to the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”).  A domestic Reporting Company is a corporation, limited liability company or other similar entity created by the filing of a document pursuant to the laws of a U.S. state or Indian tribe.  A foreign Reporting Company is a corporation, limited liability company or other similar entity that is formed under the laws of a foreign country, and registered to do business in any State or tribal jurisdiction by the filing of a document with the Secretary of State or any similar office under the laws of a State or Indian tribe. 

The CTA reporting requirements generally exempt entities that are otherwise subject to significant regulatory regimes where Congress presumably expected regulators to have visibility into the identities of the owners and ownership structures of the entities.  The exemptions thus avoid imposing duplicative requirements in these cases.  Exemptions to the Reporting Company requirements include, but are not limited to:

·         banks and bank-type entities;

·         tax-exempt entities;

·         accounting firms registered under the Sarbanes-Oxley Act;

·         publicly traded companies;

·         large operating companies employing more than 20 employees in the U.S. with gross receipts or sales over $5,000,000 and a physical presence in the U.S.;

·         subsidiaries of an exempt entity; and

·         certain inactive entities in existence before January 1, 2020. 

            The Beneficial Owner for purposes of the CTA reporting requirements is any individual who directly or indirectly, through any contract, arrangement, understanding or relationship, exercises substantial control over a Reporting Company, or owns at least 25% of the Reporting Company, or controls ownership of at least 25% of the Reporting Company.

            Substantial control over a Reporting Company includes service as a senior officer of a Reporting Company; authority over the appointment or removal of any senior officer or a majority of the board of directors of a Reporting Company; and direction, determination, and substantial influence over important decisions of a Reporting Company.

            The information required to be reported under the CTA includes a list of the Beneficial Owners and applicants which include the legal name, date of birth, residential address, business address and a unique identifying number from an acceptable identification document (e.g. unexpired passport number).  A Reporting Company must include its name, business address, jurisdiction of formation and unique identification number.  The due date for the CTA reports is currently set for January 1, 2025 for Reporting Companies in existence before January 1, 2024. 

            The penalties for violating the CTA can be harsh and include willfully providing or attempting to provide false or fraudulent beneficial ownership information; or willfully failing to report, complete or update beneficial ownership information.  The possible penalties include a fine of up to $500 per day up to a maximum of $10,000, plus possible imprisonment of up to two (2) years.

If you have any questions about the CTA and the reporting requirements thereunder, please do not hesitate to contact me.  

The Corporate Transparency Act

The Corporate Transparency Act (“CTA”) represents the most significant reformation of the Bank Secrecy Act (“BSA”) and related anti-money laundering (“AML”) rules since the U.S. Patriot Act.  The CTA was passed after pressure from other developed countries to conform to financial transparency standards. The U.S. currently does not have a centralized or complete store of information about who owns and operates legal entities within the U.S.  After much media attention, there was overall frustration by both domestic and international law enforcement agencies being able to access beneficial owner information (“BOI”). In applying the CTA, corporations, limited liability companies, partnerships and indirectly trusts, must disclose information on their “Beneficial Owners” to prevent use of shell companies from evading AML rules or hiding other illegal activities.  The CTA reporting requirements cast a broad net and can be onerous. The CTA impacts owners, as well as practitioners who advise on, and carry out, entity formation, governance, planning and tax compliance.  Final regulations have an effective date of January 1, 2024 but reporting is not required until a later date. 

            The CTA requires “Reporting Companies” to disclose specific information regarding their “Beneficial Owners” and “Company Applicants” to the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”).  A domestic Reporting Company is a corporation, limited liability company or other similar entity created by the filing of a document pursuant to the laws of a U.S. state or Indian tribe.  A foreign Reporting Company is a corporation, limited liability company or other similar entity that is formed under the laws of a foreign country, and registered to do business in any State or tribal jurisdiction by the filing of a document with the Secretary of State or any similar office under the laws of a State or Indian tribe. 

The CTA reporting requirements generally exempt entities that are otherwise subject to significant regulatory regimes where Congress presumably expected regulators to have visibility into the identities of the owners and ownership structures of the entities.  The exemptions thus avoid imposing duplicative requirements in these cases.  Exemptions to the Reporting Company requirements include, but are not limited to:

·         banks and bank-type entities;

·         tax-exempt entities;

·         accounting firms registered under the Sarbanes-Oxley Act;

·         publicly traded companies;

·         large operating companies employing more than 20 employees in the U.S. with gross receipts or sales over $5,000,000 and a physical presence in the U.S.;

·         subsidiaries of an exempt entity; and

·         certain inactive entities in existence before January 1, 2020. 

            The Beneficial Owner for purposes of the CTA reporting requirements is any individual who directly or indirectly, through any contract, arrangement, understanding or relationship, exercises substantial control over a Reporting Company, or owns at least 25% of the Reporting Company, or controls ownership of at least 25% of the Reporting Company.

            Substantial control over a Reporting Company includes service as a senior officer of a Reporting Company; authority over the appointment or removal of any senior officer or a majority of the board of directors of a Reporting Company; and direction, determination, and substantial influence over important decisions of a Reporting Company.

            The information required to be reported under the CTA includes a list of the Beneficial Owners and applicants which include the legal name, date of birth, residential address, business address and a unique identifying number from an acceptable identification document (e.g. unexpired passport number).  A Reporting Company must include its name, business address, jurisdiction of formation and unique identification number.  The due date for the CTA reports is currently set for January 1, 2025 for Reporting Companies in existence before January 1, 2024. 

            The penalties for violating the CTA can be harsh and include willfully providing or attempting to provide false or fraudulent beneficial ownership information; or willfully failing to report, complete or update beneficial ownership information.  The possible penalties include a fine of up to $500 per day up to a maximum of $10,000, plus possible imprisonment of up to two (2) years.

If you have any questions about the CTA and the reporting requirements thereunder, please do not hesitate to contact me.  

The Corporate Transparency Act

The Corporate Transparency Act (“CTA”) represents the most significant reformation of the Bank Secrecy Act (“BSA”) and related anti-money laundering (“AML”) rules since the U.S. Patriot Act.  The CTA was passed after pressure from other developed countries to conform to financial transparency standards. The U.S. currently does not have a centralized or complete store of information about who owns and operates legal entities within the U.S.  After much media attention, there was overall frustration by both domestic and international law enforcement agencies being able to access beneficial owner information (“BOI”). In applying the CTA, corporations, limited liability companies, partnerships and indirectly trusts, must disclose information on their “Beneficial Owners” to prevent use of shell companies from evading AML rules or hiding other illegal activities.  The CTA reporting requirements cast a broad net and can be onerous. The CTA impacts owners, as well as practitioners who advise on, and carry out, entity formation, governance, planning and tax compliance.  Final regulations have an effective date of January 1, 2024 but reporting is not required until a later date. 

            The CTA requires “Reporting Companies” to disclose specific information regarding their “Beneficial Owners” and “Company Applicants” to the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”).  A domestic Reporting Company is a corporation, limited liability company or other similar entity created by the filing of a document pursuant to the laws of a U.S. state or Indian tribe.  A foreign Reporting Company is a corporation, limited liability company or other similar entity that is formed under the laws of a foreign country, and registered to do business in any State or tribal jurisdiction by the filing of a document with the Secretary of State or any similar office under the laws of a State or Indian tribe. 

The CTA reporting requirements generally exempt entities that are otherwise subject to significant regulatory regimes where Congress presumably expected regulators to have visibility into the identities of the owners and ownership structures of the entities.  The exemptions thus avoid imposing duplicative requirements in these cases.  Exemptions to the Reporting Company requirements include, but are not limited to:

·         banks and bank-type entities;

·         tax-exempt entities;

·         accounting firms registered under the Sarbanes-Oxley Act;

·         publicly traded companies;

·         large operating companies employing more than 20 employees in the U.S. with gross receipts or sales over $5,000,000 and a physical presence in the U.S.;

·         subsidiaries of an exempt entity; and

·         certain inactive entities in existence before January 1, 2020. 

            The Beneficial Owner for purposes of the CTA reporting requirements is any individual who directly or indirectly, through any contract, arrangement, understanding or relationship, exercises substantial control over a Reporting Company, or owns at least 25% of the Reporting Company, or controls ownership of at least 25% of the Reporting Company.

            Substantial control over a Reporting Company includes service as a senior officer of a Reporting Company; authority over the appointment or removal of any senior officer or a majority of the board of directors of a Reporting Company; and direction, determination, and substantial influence over important decisions of a Reporting Company.

            The information required to be reported under the CTA includes a list of the Beneficial Owners and applicants which include the legal name, date of birth, residential address, business address and a unique identifying number from an acceptable identification document (e.g. unexpired passport number).  A Reporting Company must include its name, business address, jurisdiction of formation and unique identification number.  The due date for the CTA reports is currently set for January 1, 2025 for Reporting Companies in existence before January 1, 2024. 

            The penalties for violating the CTA can be harsh and include willfully providing or attempting to provide false or fraudulent beneficial ownership information; or willfully failing to report, complete or update beneficial ownership information.  The possible penalties include a fine of up to $500 per day up to a maximum of $10,000, plus possible imprisonment of up to two (2) years.

If you have any questions about the CTA and the reporting requirements thereunder, please do not hesitate to contact me.  

The Corporate Transparency Act

The Corporate Transparency Act (“CTA”) represents the most significant reformation of the Bank Secrecy Act (“BSA”) and related anti-money laundering (“AML”) rules since the U.S. Patriot Act.  The CTA was passed after pressure from other developed countries to conform to financial transparency standards. The U.S. currently does not have a centralized or complete store of information about who owns and operates legal entities within the U.S.  After much media attention, there was overall frustration by both domestic and international law enforcement agencies being able to access beneficial owner information (“BOI”). In applying the CTA, corporations, limited liability companies, partnerships and indirectly trusts, must disclose information on their “Beneficial Owners” to prevent use of shell companies from evading AML rules or hiding other illegal activities.  The CTA reporting requirements cast a broad net and can be onerous. The CTA impacts owners, as well as practitioners who advise on, and carry out, entity formation, governance, planning and tax compliance.  Final regulations have an effective date of January 1, 2024 but reporting is not required until a later date. 

            The CTA requires “Reporting Companies” to disclose specific information regarding their “Beneficial Owners” and “Company Applicants” to the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”).  A domestic Reporting Company is a corporation, limited liability company or other similar entity created by the filing of a document pursuant to the laws of a U.S. state or Indian tribe.  A foreign Reporting Company is a corporation, limited liability company or other similar entity that is formed under the laws of a foreign country, and registered to do business in any State or tribal jurisdiction by the filing of a document with the Secretary of State or any similar office under the laws of a State or Indian tribe. 

The CTA reporting requirements generally exempt entities that are otherwise subject to significant regulatory regimes where Congress presumably expected regulators to have visibility into the identities of the owners and ownership structures of the entities.  The exemptions thus avoid imposing duplicative requirements in these cases.  Exemptions to the Reporting Company requirements include, but are not limited to:

·         banks and bank-type entities;

·         tax-exempt entities;

·         accounting firms registered under the Sarbanes-Oxley Act;

·         publicly traded companies;

·         large operating companies employing more than 20 employees in the U.S. with gross receipts or sales over $5,000,000 and a physical presence in the U.S.;

·         subsidiaries of an exempt entity; and

·         certain inactive entities in existence before January 1, 2020. 

            The Beneficial Owner for purposes of the CTA reporting requirements is any individual who directly or indirectly, through any contract, arrangement, understanding or relationship, exercises substantial control over a Reporting Company, or owns at least 25% of the Reporting Company, or controls ownership of at least 25% of the Reporting Company.

            Substantial control over a Reporting Company includes service as a senior officer of a Reporting Company; authority over the appointment or removal of any senior officer or a majority of the board of directors of a Reporting Company; and direction, determination, and substantial influence over important decisions of a Reporting Company.

            The information required to be reported under the CTA includes a list of the Beneficial Owners and applicants which include the legal name, date of birth, residential address, business address and a unique identifying number from an acceptable identification document (e.g. unexpired passport number).  A Reporting Company must include its name, business address, jurisdiction of formation and unique identification number.  The due date for the CTA reports is currently set for January 1, 2025 for Reporting Companies in existence before January 1, 2024. 

            The penalties for violating the CTA can be harsh and include willfully providing or attempting to provide false or fraudulent beneficial ownership information; or willfully failing to report, complete or update beneficial ownership information.  The possible penalties include a fine of up to $500 per day up to a maximum of $10,000, plus possible imprisonment of up to two (2) years.

If you have any questions about the CTA and the reporting requirements thereunder, please do not hesitate to contact me.