By Alex Montoya and Payton Hostens

The Corporate Transparency Act (CTA) will go into effect January 1, 2024. This act will require new and existing business entities to report certain beneficial ownership information (BOI) to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

The CTA is wide-sweeping and is intended to apply to millions of small business across the country.

To assist small business owners in complying with the BOI reporting rule, FINCEN recently published a Small Entity Compliance Guide. Starting in 2024, many entities created in or registered to do business in the United States will be required to report information about their beneficial owners—the individuals who ultimately own or control a company—to FinCEN. The Guide is intended to help businesses determine if they are required to report their beneficial ownership information to FinCEN.

“This guide is the latest in our ongoing efforts to educate the public about these important new requirements,” said Andrea Gacki, Director of FinCEN. “We are committed to making this process as simple as possible, particularly for small businesses.”

“This is also a critical step towards implementing the Corporate Transparency Act, which will help the Treasury Department and FinCEN expose bad actors abusing the U.S. financial system by hiding their identity behind opaque corporate structures,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson.

The Guide is now available to download on here.  Among other things, the Guide:

  • Provides information on what companies need to report and outlines the 23 company exemptions; • Helps identify who is a Beneficial Owner of a company;
  • Describes each of the BOI reporting rule’s provisions in simple, easy-to-read language;
  •  Answers key questions; and
  • Provides interactive checklists, infographics, and other tools to assist businesses in complying with the BOI reporting rule.

The requirements become effective on January 1, 2024, and companies will be able to begin reporting beneficial ownership information to FinCEN at that time. Failure to comply with the CTA’s reporting requirements can lead to civil and criminal penalties, including a fine of up to $10,000, imprisonment for up to two years, or both.

FinCEN will provide additional guidance on how to submit beneficial ownership information soon. Small businesses can continue to monitor FinCEN’s website for more information, subscribe to FinCEN updates, or visit our website where we will continue to post updates as FinCEN releases them.

Abrahams Kaslow & Cassman LLP is committed to assisting you achieve your business goals and is ready and willing to help our clients navigate the new requirements of the CTA. Please contact us at 402.392.1250 as soon as possible to discuss your entity’s potential reporting requirements.