Get prepared! The Corporate Transparency Act takes effect on January 1, 2024
The significant effective date of the Corporate Transparency Act is rapidly approaching on January 1, 2024.
In today’s blog post, we’ve got you covered – guiding you through all the crucial details and offering insights on the necessary steps to take.
Now every domestic or foreign corporation, LLP, or any other company that submits documents to the secretary of state must submit a Beneficial Ownership Information report to the US Treasury’s FinCEN.
If you own and run a U.S. domestic company, such as a corporation, LLP, or any other entity established through filing with a secretary of state or a similar office under state or tribal law, or if you own and operate a foreign company, like a corporation or LLC, formed under foreign country laws and registered to do business in any state or tribal jurisdiction by filing with a secretary of state or a similar office, then you are required to submit a Beneficial Ownership Information report to the U.S. Treasury’s FinCEN.
If you have regulated organizations and those supervised by other authorities, such as securities issuers, government agencies, banks, publicly traded companies participating in stock exchange trading reporting to the SEC, credit unions, money changers, brokerage firms, tax-exempt organizations, insurance companies, utility companies, etc., then you are not required to file.
Sure. You do not have to bother with the procedure, we do everything for you to be compliant with the new Act.
The Corporate Transparency Act, enacted at the federal level in the United States in 2021, is designed to ensure transparency within corporate structures. Comparable laws have been in place in various other countries for some time.
The United States, in enacting this type of legislation, lagged behind numerous European countries, demonstrating a clear intention not to fall behind any further.
The legislation is designed to combat money laundering and terrorist financing across U.S. states by promoting transparency within corporate entities.
You have to file your entity’s beneficial owner details on the US Treasury’s FinCEN site, or order the service at LAVECO USA.
The obligation to submit a Beneficial Ownership Information report under the Corporate Transparency Act comes into effect on January 1, 2024.
The law comes into effect on January 1, 2024. Declarations cannot be submitted before this date.
Companies established before January 1, 2024, have the entire year of 2024 to comply with their declaration obligations. Companies established after January 1, 2024, must submit their declaration within 30 days after receiving notification from FinCEN. Subsequent changes to any information in the declaration must be reported within 30 days of the change.
A beneficial owner is classified into one of two categories:
- an individual who either directly or indirectly has significant control over a reporting company, or
- owns or controls a minimum of 25% of the company’s ownership interests.
- Any business name used by the company
- The company’s headquarters and location of operations
- State of registration
- Company’s tax number
- full legal name,
- date of birth,
- complete current residential street address (except for company applicants who form or register an entity as part of their business, in which case the business’s street address is needed),
- Unique identifying number and issuing jurisdiction from either a current U.S. passport, state/local ID document, driver’s license, or if the individual has none of those, a foreign passport, and
- An image of the document from which the unique identifying number was obtained.
The Beneficial Ownership Information report must be submitted in electronic form to FinCEN. The necessary form (as of November 2023) was not yet available but will be uploaded to the office’s website soon.
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