The January 1, 2025, deadline for the Corporate Transparency Act (CTA) beneficial ownership reporting requirement is fast approaching. This law, aimed at enhancing transparency and combating financial crimes like money laundering and tax evasion, mandates many businesses to disclose ownership details to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
Who Needs to File?
Most U.S. corporations and limited liability companies (LLCs) must report unless they qualify for one of the 23 exemptions.
What Information Must Be Reported?
You’ll need to submit details about “beneficial owners” who:
- Hold or control at least 25% of the company, or
- Exercise substantial influence over business decisions, even without owning shares.
Beneficial ownership encompasses individuals with control, such as senior officers or those who have authority over company governance.
Key Deadlines:
- Existing Companies (formed before January 1, 2024): File by January 1, 2025.
- New Companies (formed after January 1, 2024): Must report within 90 days of registration.
What Are the Risks of Noncompliance?
Failing to comply with the reporting requirements can result in serious consequences. Companies may face civil penalties of up to $10,000 and possible criminal charges. Corrections for errors or omissions must be made within 90 days of the original submission to mitigate penalties.
How Can MGO Support You?
We want to emphasize that the CTA mandate and support materials are detailed and legal in nature. While MGO does not assist in preparing or filing these reports, we can connect you with reputable legal professionals who can help. If you need a referral or have questions, don’t hesitate to contact your MGO advisor.
For more information, visit the FinCEN website.