The Corporate Transparency Act is a new law taking effect on January 1, 2024. It will require companies registering as a business in a U.S. state, territory, or Indian tribe to file information regarding their beneficial owners and corporate applicants in a database maintained by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) unless the company meets one of the 23 exemptions. This has been created to increase transparency in business activities, prevent money laundering, and improve the ability of FinCEN and other agencies to protect U.S. national security and the U.S. financial system from illicit activities.
Here is a FAQ to help answer questions you might have on this:
- Are you required to file?
If you registered your business with the secretary of state, you are most likely required to file this. Here is a link to the 23 exemptions:
After reviewing this for our client base, we believe hardly anyone will be exempt. If you are not sure, please contact your corporate attorney to help determine this.
- When will this be filed?
- If your business is formed before January 1, 2024, you have until January 1, 2025, to file this report with FinCEN.
- If your entity forms on January 1,2024 or after, you have 90 days to file this from the time your business is registered. As of January 1, 2025, the 90-day period to make an initial filing for a newly created entity will be reduced to 30 days.
- What will be reported?
- Company legal name and current principal place of business street address in the U.S.
- Any assumed business name (DBA) used by the company.
- Taxpayer identification number (TIN or EIN).
- Each Beneficial Owner’s name, birthdate, residential street address, and an identifying number with an image of an acceptable ID (e.g., driver’s license or passport).
- Each Company Applicant’ name, birthdate, residential street address, and an identifying number with an image of an acceptable ID (e.g. driver’s license or passport).
- How will this be filed and who will be filing this for you?
- This will be filed electronically through a secure filing system available via FinCen’s website at https://www.fincen.gov/boi . No one will be able to file until January 1, 2024, or after.
- Please check with your corporate attorney. They may help file this on your behalf when they either register your new entity formed or file your annual secretary of state licensing renewal if they assist you with this currently.
- If you currently renew your secretary of state licensing yourself, you can file this directly on the FinCen website using the link above. We recommend you do this when you are renewing your annual licensing each year as long as it is by January 1, 2025, for existing entities, by 90 days of registration for any new entity formed during 2024 or 30 days if the new entity is formed on or after January 1, 2025.
- Fluence is not legally able to help you file this. If your attorney is not able to help do this for you and you do not feel comfortable doing this yourself, please consider hiring a company like Corpnet who is currently advertising a charge of $199 per entity to help with this reporting.
- What happens if you do not file this?
If you do not file this on time or file false information, you may receive fines up to $500 per day for ongoing violations in addition to criminal consequences which may include imprisonment for up to two years and/or a fine of up to $10,000.
We hope this gives you guidance on what you need to do for this new law taking effect on January 1, 2024. If you have any further questions, please do not hesitate to contact your manager or partner at Fluence.