Congress recently enacted the Corporate Transparency Act. This Act requires new filings by every business entity operating in the United States, with limited exceptions. The Act is effective 1/1/24 and requires that (1) all new entities formed after 1/1/24 file the required information within 30 days of creation, and (2) all entities existing on 12/31/23 file the required information by 12/31/24.
The required information includes identifying information about the entity plus, and most importantly, personal information about every beneficial owner, defined as someone who holds a 25% or more ownership interest in the entity or someone who has substantial control over the entity, such as certain officers, directors, and/or managers.
The required information for each person/entity who must file includes name, address, email, phone, the name and number of an identifying document (passport, driver’s license, etc.), and a photo of that identifying document. An updated filing must be made within 30 days of a change in any required information.
The information will be filed with the US Treasury’s Financial Crimes Enforcement Network (“FinCEN”) and will be made available on request only to authorized users, including law enforcement, government agencies, and other select users.
One purpose of this reporting is to prevent the hiding or laundering of funds and other assets through anonymous shell entities. Some entities are exempt, including tax-exempt organizations and large businesses (more than 20 employees, more than $5,000,000 annual gross revenue, and physical office in the US), and some 20 or so other types of entities.
Murray Plumb & Murray is reviewing the FinCEN filing requirements, some of which have not been finalized, and will be able to assist you and your company make all required filings. Gathering the necessary information will be the first step and we are establishing a process and will have forms to securely capture that information as painlessly as possible.
We will send further bulletins as we learn more. In the meantime, more information is available at https://www.fincen.gov/beneficial-ownership-information-reporting-rule-fact-sheet.
Learn more with our October update: