Introduction to the Corporate Transparency Act
At GJM Advisory, we are proactive in informing our clients on news that may impact their business.
We are reaching out to make you aware of the Corporate Transparency Act (“CTA”), which went into effect on January 1, 2024 and includes strong penalties for noncompliance. The goal of this act is to help prevent and combat money laundering, terrorist financing, corruption, and tax fraud.
Due to concerns with foreign investment in United States entities, the Federal Government is requiring all entities (i.e. corporations, LLCs, limited partnership, etc. and in some cases sole proprietorships) regardless of their size, to report their beneficial ownership and individuals creating entities.
Business entities formed prior to January 1, 2024 had until January 13, 2025, to comply with the CTA's reporting requirements. However, another delay has moved the timeline, so we do recommend you file immediately to avoid potential penalties in the future.
New domestic and foreign registered companies must file a beneficial ownership information (BOI) report within 90 days of formation/registration.
The CTA requires the disclosure of information related to your company and its owners/principals. This includes anyone who either owns 25% or more of an entity or exercises substantial control over the entity.
It is important to note that there are strong penalties for failure to comply. This may include civil penalties up to $500 per day for each and every day you are not in compliance with the reporting requirements. Additionally, criminal penalties including imprisonment of up to 2 years and/or a fine of up to $10,000 may be imposed.
Reporting Companies are directed to electronically file informational reports with the Financial Crimes Enforcement Network ("FinCEN") through their Beneficial Ownership Secure System (BOSS).
It is worth noting that this new regulation has been subject of numerous legal disputes so requirements are subject to change at any time. Please monitor the situation and we will do our best to keep you apprised of any material developments.
We hope this information is helpful and please reach out to info@GJMadvisory.com if you require us to file this report on your behalf.