The federal Corporate Transparency Act was passed in 2021 but takes effect this coming year. With the goal of tracking and limiting illegal money flowing through the American economy, the Act imposes reporting requirements on most existing and new small businesses in the United States.
Specifically, the Act requires companies with less than $5,000,000 in annual revenue and 20 or fewer employees to file a report with the U.S. Department of Treasury identifying any person with a “beneficial ownership interest” or “BOI.” Among others, persons with a BOI include:
For 2024, new entities must report within 90 days. Starting in 2025, that window shortens to 30 days. Existing entities that are subject to the Act must file reports by the end of 2024. And any covered entity that sees a change in its ownership must file an updated report.
The Act carries stiff penalties for non-compliance: Fines of up to $10,000 and/or two years in jail.
As implementation under the Act unfolds, we will do our best to keep you posted. In the meantime, for more information, please check the Financial Crimes Enforcement Network website. As always, if we can be of help, do not hesitate to contact us at email@example.com or at 248.477.6300.