One of my favorite things I get to do at Rieger Sadler Joyce LLC is assist individuals in making their dreams a reality. The area where this is most present is assisting in forming new businesses and aiding existing businesses with their corporate structure and operations. Regardless of whether you are an entrepreneur working on your first business venture or an established corporation, you will experience a major shift in federal oversight and regulation in 2024 due to the recently enacted Corporate Transparency Act.

The Corporate Transparency Act imposes substantial new reporting obligations on business entities to reduce the opportunity for corporate criminal activities, such as money laundering, fraud, and the financing of illegal ventures. The new reporting obligations mandated by the Act went into effect on January 1, 2024, and require many companies doing business in the United States to report information about the individuals who ultimately control or have beneficial ownership of the entities. Therefore, effective this year, companies must report information to the Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Department of the Treasury. Below is an overview of the requirements of the Corporate Transparency Act.

When Must a Company Register:

Companies created before January 1, 2024, have until January 1, 2025, to register and report their beneficial ownership.
Companies created after January 1, 2024, will have ninety (90) days to file their registration.
Companies created after January 1, 2025, will have thirty (30) days to file their registration.

Which Companies Must Register:

Corporations, limited liability companies, and other companies otherwise created in the United States by filing an instrument with the secretary of state or any similar office; and
Foreign companies registered to do business in any U.S. state.

New reporting deadlines and federal compliance obligations can be easy to overlook. Working with an experienced business attorney can help ensure filings are completed accurately and on time.

Unless your corporation qualifies for an exception, you will need to report your beneficial ownership information. The most common exceptions include publicly traded companies, nonprofits, and other large operating companies. Most small corporations and LLCs will have to report their information.

Companies must report their (i) Beneficial Ownership and (ii) Company Applicants.

A Beneficial Owner is:

Any individual who exercises substantial control over the company; or
Any individual who owns/controls at least 25% of the ownership interests in the company.

The Company Applicant:

Must be an individual, not a company or legal entity; and
Should be the individual who directly filed the registration, as well as any individual who directs or controls the filing.

The Corporate Transparency Act establishes civil and criminal penalties for entities that fail to comply with the reporting requirements. This is just a brief overview of this new legislation that substantially impacts corporate governance and formation. For a complete overview and assistance in meeting your registration requirements, please give us a call!

Corporate Transparency Act Compliance Assistance

The Corporate Transparency Act introduces significant new reporting obligations for corporations, LLCs, and other business entities. Rieger Sadler Joyce LLC assists entrepreneurs and established companies with entity formation, corporate governance, and ongoing compliance with federal reporting requirements.

If you have questions about whether your company must report beneficial ownership information—or how to meet FinCEN’s requirements—contact our office for guidance.

Written by: Gunner Joyce | Oklahoma Business Attorney

FAQs

What is the Corporate Transparency Act?
The Corporate Transparency Act is a federal law that requires certain businesses to report beneficial ownership information to FinCEN to combat financial crimes.

Who must comply with the Corporate Transparency Act?
Most small corporations and LLCs formed or registered in the United States must comply unless they qualify for a specific exemption.

What happens if a company fails to report?
Failure to comply may result in civil penalties and criminal liability under federal law.

Is this a one-time filing?
No. Companies must update FinCEN when ownership or control information changes.

THIS IS MARKETING MATERIAL. THIS IS ONLY GENERAL INFORMATION AND IS NOT TO BE USED AS LEGAL ADVISE OR TO ADDRESS FACT-SPECIFIC LEGAL ISSUES. YOU SHOULD ALWAYS CONSULT AN ATTORNEY DIRECTLY FOR LEGAL ADVICE. WE ASSUME NO LIABILITY AS TO THE USE OF THIS MATERIAL.