A new U.S. federal law went into effect on January 1, 2024 called the Corporate Transparency Act (“CTA”). The CTA imposes new burdensome reporting requirements regarding beneficial ownership and control targeted at small private companies.

Essentially, the CTA requires certain entities, called “reporting companies” to report information about the companies themselves and personal information regarding their “beneficial owners” (i.e. a passport/US driver’s license and current residential address) to the Financial Crimes Enforcement Network (“FinCEN”), a bureau of the United States Department of Treasury.

The law defines “beneficial owners” as individuals who hold at least a 25% direct or indirect interest in the reporting company, as well as all individuals with “substantial control” over the reporting company. An individual is deemed to have “substantial control” if the individual meets any of four general criteria: (1) the individual is a senior officer such as a President, Chief Financial Officer, General Counsel, Chief Executive Officer, Chief Operating Officer of any other officer regardless of title who performs a similar function as the foregoing officers; (2) the individual has authority to appoint or remove certain officers or a majority of directors of the reporting company; (3) the individual is an important decision-maker; or (4) the individual has any other form of substantial control over the reporting company.

Entities created prior to January 1, 2024, have until January 1, 2025 to file a BOI report. Entities created on or after January 1, 2024, have 90 days to file a BOI report. BOI reports are filed electronically through FinCEN’s website.
There is a $500 per day civil fine for failure to comply.

Kalbian Hagerty LLP can assist you with complying with the CTA including determining whether or not you are a reporting company, and if you are a reporting company, completing and filing the BOI report with FinCEN.

Email a Kalbian Hagerty expert on the CTA:

James R. Hagerty

Chloe McDougal

Tess Atkins

or call us at  +1 (202) 223-5600

Click here to view/download a detailed pdf of this Client Alert: Corporate Transparency Act