CTA Compliance Guidance

Legal Guidance for Filing Beneficial Ownership Information Reports

What is the Corporate Transparency Act?

The Corporate Transparency Act (CTA) is a federal law that went into effect on January 1, 2024, that imposes new reporting requirements on virtually all companies. Under the CTA, business entities operating in the U.S. are required to file a Beneficial Ownership Information Report (BOIR) with the Financial Crimes Enforcement Network (FinCEN). A compliant BOIR requires disclosing information on the beneficial owners and substantial control parties along with company information.

The penalties for failing to disclose this information in a timely manner are $591 per day up to a maximum of $10,000 and two (2) years in jail for willful non-compliance.

FinCEN estimates that at least 32 million businesses will need to file a report by 2024. Part of the CTA’s complexity is determining who is a beneficial owner or a control party under the current statutes and regulations. Some of the more complex ownership structures will require an advanced understanding of the statute and guidance on identifying individuals required for the BOIR.

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Comply with the CTA to Avoid Severe Penalties

Why CTA Guidance?

Where companies are owned by companies, the calculation of beneficial ownership interest can be complex. Likewise, if there are statutory trusts with ownership interests or stock options in corporations, these scenarios will require additional analysis to determine who should be included in a company’s BOIR. Having an attorney who understands the nuances of the law can go a long way in making sure a company is compliant with the CTA.

What other CTA filings are required?

While the CTA does not require annual filings, it does require additional filings if information changes within a company or with beneficial owners. A business then has only thirty (30) calendar days to file an updated BOIR. Moving forward, many business entities will need to draft and implement policies to ensure continued compliance with the CTA. Similarly, individuals acquiring ownership interests in private companies will need to assess whether their ownership interests will require them to be included in the company’s BOIR.

Why The Williams Law Firm?

In addition to over fifty (50) years of experience in business formation, trusts, and corporate law, The Williams Law Firm, P.A. has followed this regulation since it was first proposed over a decade ago. Our attorneys are actively engaged in creating and supporting a subsidiary dedicated to providing assistance with these filings at www.ctaboi.com.

“Injustice anywhere is a threat to justice everywhere.”

– Martin Luther King, Jr.

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