Corporate Transparency Act & Beneficial Ownership Information

The Quick Run Down:

The Corporate Transparency Act is part of the Anti-Money Laundering Reforms of 2021 & it requires the following:

Existing entities registered with the Secretary of State must file by Jan 1, 2025. Don't let the word corporate throw you off. This applies to partnerships, trusts, & sole proprietors who registered their companies or LLCs with their Secretary of State also.
New entities registered with the Secretary of State after Jan 1, 2024 but before January 1, 2025 must file within 90 days of opening.
New entities registered with the Secretary of State after Jan 1, 2025 must file within 30 days of opening.
All officers (regardless of whether they are an owner) and any beneficial owner who owns at least 25% of the company must be reported.
You can file this yourself, or you can hire an accountant or attorney to do this for you. It will not be included in your annual tax return.
Nonprofits are exempt from filing if they are a 501(c) and exempt under IRC Section 501(a).

Who qualifies as a beneficial owner?

All owners or partners with a 25% or more ownership
All beneficial owners - those that can make decisions that affect the business regardless of whether or not they actually own the business
Anyone with a title of president, vice-president, CFO, CEO, COO, or general counsel is considered a beneficial owner and must be reported

If you have questions on this, reach out to your attorney before filing as I do not do legal advice.

What to Report: Company & Beneficial Owner Information

Existing companies need to report:

Information about the company
Information about the beneficial owners.

Newly created entities need to report

Information about the company
Information about the beneficial owners.
Information about its company applicants

What information needs to be reported about the company?

Full legal name
Doing business as name
Complete address
State, tribal, or foreign jurisdiction
Taxpayer Identification Number

What information needs to be filed for every beneficial owner and company applicants?

Full name
Birthday
Current address
Legal ID with photo submitted (passport or state id)

Who is a company applicant?
This is the person who directly submits the information to the Secretary of State and the person who gathers the information. This is usually the owner, but can be an assistant, attorney, or accountant. Sometimes this is more than 1 person.

When do you file?

Existing entities have until January 1, 2025 to become compliant with these new regulations.
Entities formed January 1, 2024 or later have 30 days *updated 12/1 2024 entities will have 90 days, 2025 entities will have 30 days*
Any change in ownership requires an update within 30 days
Any change in address of the business requires an update within 30 days
Any change in address of owners or beneficial owners requires an update within 30 days
Amended returns also have 30 days to be filed
Closing your business in 2023 does not necessarily exempt you from filing. Having $1,000 sent or received in a rolling 12-month calendar meets the requirements for filing your business. If your inactive LLC just spent $1,000 on property taxes or buying an asset, it now has a filing requirement. Holding real estate usually means it is active.
This is not an annual form

Where do you file this information?

You will file this information through a government agency called FinCEN. You can file this yourself for free or you can pay an attorney or accountant to file this for you. If you file this form yourself it will be free outside of your time.

Why are you filing this information?

You are filing these to stay compliant with a new law passed by Congress. The penalties for not being compliant are:

Civil penalties of $500 per day (no max stated)
Criminal penalties maxed at $10,000, up to 2 years in prison, or both