Companies established in the U.S. must document their ownership information with the Financial Crimes Enforcement Network this year.
02/27/2024 2:30 P.M.
2 minute read
The Corporate Transparency Act is now in effect, requiring companies established in the U.S. to identify and report owners in a new form for the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
Companies will be required to file beneficial ownership information (BOI) on an individual “who owns or controls at least 25% of a company or has substantial control over the company, and a company applicant is an individual who directly files or is primarily responsible for the filing of the document that creates or registers the company,” according to a compliance guide (PDF) on Beneficial Ownership Information.
Companies established in the U.S. must report their ownership information any time before Jan. 1, 2025, according to a client alert from Brownstein Hyatt Farber Schreck LLP.
ACA International members, including small businesses, are included in this requirement, but should review the list of 23 entities that may be exempt from the reporting requirements on page four of the compliance guide.
There are specific reporting requirements for companies created after Jan. 1, 2024:
- Reporting companies created or registered on or after Jan. 1, 2024, and before Jan. 1, 2025, have 90 calendar days after receiving actual or public notice that their company’s creation or registration is effective to file their initial BOI reports.
- Specifically, this 90-calendar day deadline runs from the time the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.
- Reporting companies created or registered on or after Jan. 1, 2025, will have 30 calendar days from actual or public notice that the company’s creation or registration is effective to file their initial BOI reports.
The Corporate Transparency Act is “designed to cast light on small closely held private companies that can be used to hide identities for suspicious purposes; thus, even the smallest firms must comply,” according to the alert from Brownstein.
The reporting website is available on the FinCEN website. More complex operations with small privately held subsidiaries may wish to review the requirements and exceptions with your legal or accounting advisors, according to Brownstein.
For more information, ACA members may also access a recording of the ACA Huddle featuring business law expert and Wolters Kluwer attorney Sandra Feldman available here.
Feldman unravels the intricacies of the new mandates, providing a clear understanding of their implications on the accounts receivable management industry and requirements for businesses.
Remember, subscribe to ACA Daily and Member Alerts under your My ACA profile when logged in to acainternational.org to receive updates on the ACA Huddle.