The Corporate Transparency Act (“CTA”)—Title LXIV of law H.R.6395 —passed in 2021, took effect on January 1st, 2024. The Act requires that companies submit a Beneficial Ownership Information Report (“BOIR”) containing the names, and certain information, for each of their Beneficial Owners. This requirement applies to nearly all types of entities conducting business in the United States. Companies required to submit BOIRs are defined as “Reporting Companies”.
Is my company a Reporting Company?
Most likely.
Reporting Companies are defined as any entities operating in the US (whether domestic or foreign) that are registered with a Secretary of State of at least one US State.
The law does, however, provide certain exemptions from the reporting requirement. Exempt entities include certain types of banking institutions, securities brokerages, and financial advisory firms. There is also an exemption for “Large Companies” employing more than 20 full-time employees, and grossing more than $5,000,000 in revenues per year.
What is a Beneficial Owner?
The term “Beneficial Owner” applies to any individual who either:
*Note: The exercise of substantial control does not require that the individual hold an ownership interest.
What are the deadlines for submission of my company’s BOIR?
The deadline for submission of your BOIR is based on when your entity was first registered with the Secretary of State of at least one US State. Below is a guide for determining your deadlines based on the date of said registration:
What are the penalties for failing to comply?
Any person who willfully violates the reporting requirements stipulated in the CTA may be subject to:
In the case of certain complex entity structures, a legal analysis may be required to identify the Beneficial Owners. Our Global Compliance Professionals can provide assistance in the identification of the Beneficial Owners, as well as the completion and submission of the Beneficial Ownership Information Report.
For further information, please contact us at: ctafilings@aragonpartnersllp.com