New reporting requirements under the Corporate Transparency Act (CTA) came into effect on January 1, 2024. The CTA requires certain business entities to file information on their beneficial owners with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury. The definition of a beneficial owner is an individual who either exercises substantial control over the reporting company or directly or indirectly owns or controls at least 25 percent of the ownership interest in the reporting company.
According to the Corporate Transparency Act (CTA), single-member LLCs are not exempt from filing beneficial ownership information reports with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury. If you have formed a single-member LLC by filing articles of organization or other formation documents with the Secretary of State in your state, then you fall within the BOI reporting requirements of the Corporate Transparency Act and are a reporting company.
Certain types of entities are exempt from the new reporting under the Corporate Transparency Act (CTA), including but not limited to banks, credit unions, public accounting firms registered with the PCAOB, and large entities that exceed $5 million in gross receipts and have 21 or more full-time employees.
We recommend that you contact legal counsel for additional information on how these requirements may affect your business. They can provide guidance on whether your business is required to file a report, what information must be reported, and when a report is due. Let us know if you need a referral.
Please note that FinCEN has been notified of recent fraudulent attempts to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act. The fraudulent correspondence may be titled “Important Compliance Notice” and asks the recipient to click on a URL or to scan a QR code. Those e-mails or letters are fraudulent. FinCEN does not send unsolicited requests. Please do not respond to these fraudulent messages or click on any links or scan any QR codes within them.
