Corporate Transparency Act Reporting Requirements
As of January 1, 2024, most businesses, including local limited liability companies, corporations, and law firms, will be required to report company ownership information to the Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”). Attorneys and their clients must be mindful of these new obligations and comply or face potential civil or criminal penalties.
The Corporate Transparency Act (“CTA”), which passed on January 1, 2021, applies to most business entities, and requires them to file a disclosure report with FinCEN. The required disclosures include (i) company information such as the full legal name, any “doing business as” name, current address, jurisdiction of formation and federal tax identification number, and (ii) beneficial owner information such as full legal name, current address, and a unique identifying number such as a passport number or driver’s license number along with a photo of the document, or a “FinCEN number.”
There are few exempt businesses from the CTA, meaning that most businesses in Rockland County and beyond are subject to the Act’s reporting requirement. The few categories exempted from the CTA include banks, companies with greater than 20 employees and more than $5 Million in annual revenue, or inactive companies. Most local businesses will not fit into those few exempt categories and, therefore, are subject to the reporting requirement.
Some bills have been introduced in the House (H.R. 4035) and the Senate (S. 2623) to delay the implementation of the CTA. However, as of now, for companies formed prior to January 1, 2024, they have one (1) year – until January 1, 2025 – to file the report. For companies formed after January 1, 2024, entities will have only thirty (30) days to make the filing.
For small businesses already tasked with remembering annual or biannual filings, maintaining their corporate books, and holding meetings, as well as running their businesses, this new obligation may easily get overlooked. Attorneys should be prepared to support their business clients and help them (and themselves) with this mandatory filing.
 The Protecting Small Business Information Act of 2023.