Time is running out for Corporate Transparency Act (CTA) compliance. The law, which became effective on January 1, 2024, requires certain entities – or “reporting companies” – to disclose information about their beneficial ownership to the Financial Crimes Enforcement Network (FinCEN) by January 1, 2025.
While many companies created or registered to do business in the US after January 1, 2024 have already complied with these requirements, FinCEN estimates that close to 25 to 30 million businesses subject to the CTA’s requirements have not yet filed. In addition, the FinCEN beneficial ownership reporting website has reportedly experienced several unexpected service interruptions in November, and failure to comply may leave companies open to civil or criminal penalties.
For these reasons, businesses are encouraged to determine which individuals will need to report beneficial ownership information well before December 31, 2024 and begin reaching out to those individuals to collect the required information and documents, described in this client alert.