Prepare Now for the January 1, 2025 Corporate Transparency Act Deadline

The regulations adopted by the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act require most companies formed or registered to do business in the United States before January 1, 2024 to file an initial beneficial ownership information report with FinCEN by January 1, 2025, unless they are exempt.

If you are required to file a report and have taken advantage of this extended filing deadline, you should be preparing to make the filing now. The Corporate Transparency Act reporting requirements are complex and may require information from third parties that could be difficult to obtain. In addition, you will need to implement a system to capture any future changes in the information reported so you will be in a position to file an updated report with FinCEN when required.

While companies formed or registered during 2024 are required to file an initial beneficial ownership information report within 90 days after the date they receive notice of their formation or registration (or such information becomes publicly available), this period will be shortened to 30 days for companies formed or registered on or after January 1, 2025.

The first step to comply with the Corporate Transparency Act is determining whether your company qualifies for an exemption from those requirements. FinCEN’s regulations specify 23 categories of companies that are exempt. A list of the exemptions can be found in FinCEN’s Small Entity Compliance Guide. If a company qualifies for one of these exemptions, it will not be required to file a beneficial information ownership report unless its exempt status changes in the future.

If your company does not qualify for one of the exemptions, you will need to gather information on your company’s beneficial owners and, in the case of companies formed during 2024 and after, its company applicants.

A company’s beneficial owners are those natural persons who directly or indirectly own or control 25% or more of its ownership interests or exercise substantial control over the company. FinCEN’s rules defining the ownership or control of ownership interests and substantial control are complex. The application of those definitions for companies other than those with a simple ownership structure will require a detailed analysis and may involve interpretative issues that have not been clearly addressed, if at all, by FinCEN.

A company will need to obtain the required information from its beneficial owners, who may be unavailable or reluctant to provide that information, which can require substantial time and effort. In addition, the beneficial ownership reports must be filed with FinCEN electronically, which may itself present a challenge for certain companies.

For these reasons, it is unwise to wait until the last minute to file a beneficial ownership information report with FinCEN.

If there are any changes in the future to the information contained in a beneficial ownership information report, an updated report must be filed within 30 days after the change. A reporting company will need to have a system in place to make sure it receives timely notice of any such change from its beneficial owners so it can comply with this requirement.

The failure to comply with the Corporate Transparency Act’s reporting requirements can result in civil and criminal penalties, including a fine of up to $10,000 and imprisonment for up to two years.

A detailed analysis of the Corporate Transparency Act’s reporting requirements is included in our prior alert available here and on FinCEN’s website.

If you need any assistance in complying with the Corporate Transparency Act's January 1, 2025 deadline, please contact one of the members of our Corporate Transparency Act practice group below no later than November 1, 2024.

The Clock is Ticking: Are You Prepared for the Corporate Transparency Act Filing Deadline?

Register Now for a Refresher Course on October 9

The regulations adopted by the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act require most companies that were formed or registered to do business in the United States before January 1, 2024 to file an initial beneficial ownership information report with FinCEN by January 1, 2025, unless they are exempt.   

Join us for a refresher course about your potential obligations under the Corporate Transparency Act, key provisions, timelines, and penalties for non-compliance. The Buchanan team will also provide an update regrading recent court challenges to the CTA.  Gain valuable guidance on what actions you should be taking now to comply. 

Wednesday, October 9
12:00 p.m. – 1:00 p.m. Eastern
Live Broadcast
Via Zoom

REGISTER HERE

Registration is free, but is required. Space is limited.