The Corporate Transparency Act creates a requirement that information of those who own or control companies be reported to the U.S. Government to make it more difficult for bad actors to hide or benefit from ill-gotten gains through shell companies. This information is reported to the Financial Crimes Enforcement Network (FinCEN) who began accepting reports on January 1, 2024. Companies created before January 1, 2024 have until January 1, 2025 to file their initial beneficial ownership information report. Companies created after January 1, 2024 but before January 1, 2025 have 90 calendar days to report. Companies created after January 1, 2025 have 30 calendar days after the company’s registration with the Secretary of State. All corporations, limited liability companies and other entities created by filing with the Secretary of State are required to report. 

A beneficial owner is determined to be anyone who exercises substantial control over the reporting company or owns or controls at least 25% of the ownership interest. An individual can exercise substantial control in four different ways: 1) acting as a senior officer, i.e., President/CFO, Treasurer/Chief Financial Officer, or similar function; 2) having authority to appoint or remove certain officers; 3) being an important decision maker; 4) having any other substantial form of control over the company.



Please let us know if you require assistance in complying with this new federal reporting requirement.