Important Reminder: CTA Filing Deadline Approaching
Under the Corporate Transparency Act (CTA), many business owners must file corporate transparency reports that provide beneficial ownership data.
The filing deadline for most businesses is January 1, 2025. Businesses that fail to file by this deadline or don’t update the needed documents may face up to two years imprisonment and fines up to $10,000 plus civil penalties up to $591 per day. Failing to file by the deadline can be pretty costly.
The CTA, enacted in 2021, aims to combat illicit activity such as tax fraud, money laundering, and financing for terrorism. It mandates specific ownership information from domestic businesses operating within or accessing the U.S. market and is designed to prevent individuals with malicious intent from hiding or benefiting from the ownership of their domestic entities.
A beneficial owner is an individual who directly or indirectly owns a company. This person either has a major influence on reporting the company’s decisions or operations, owns at least 25% of the company’s shares, or has a similar level of control over the company’s equity.
All reporting companies must provide their legal name, trademarks, and current U.S. address. A taxpayer identification number is also required, and the taxpayer must specify the jurisdiction location where the company was formed or registered.
Information regarding the business, its beneficial owners, its company applicants, and the jurisdiction of documents is required for businesses registered or established after January 1, 2024. However, businesses registered or established before January 1, 2024, may omit information about company applicants.
Please get in touch with your attorney to help navigate this filing.