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Corporate Transparency Act Update

08 Nov

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Update Applicable to:

All U.S. and Foreign entities created in or registered to do business in the U.S., or any employers who use special purpose entities created by the filing of a document with a Secretary of State (or similar office under state law, Indian Tribal law, or foreign jurisdictions).

What happened?

The Corporate Transparency Act (CTA) is a new regulation that requires entities to disclose information about their beneficial owners and the individuals who form those entities (unless exempt, such as banks and others), aiming to combat money laundering, terrorist financing, and promote national security.

What do employers need to do?

The Holland & Knight law firm recommends that employers who have a reporting company ensure that their attorneys and accountants are aware of the filing/requirements, so that if changes were to occur in the future, information can be updated timely and correctly.

What are the details?

The regulation, issued by the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) under the CTA, requires all entities created or registered by the filing of a document with the secretary of state or similar office of a state to disclose to FinCEN certain information about the entity (“reporting company”), personal information about certain beneficial owners of the reporting company (“beneficial owner(s)”) and personal information about the people that form the reporting company (“company applicants”). 

THE REPORTING COMPANY:  the following information must be provided:

Initial Report Content: Link

Beneficial Owners: Link

Company Applicants: Link

Starting January 1, 2024, all entities unless exempt, will be required to file this information.

Timing of Reports:

  • For New Entities: Any entity that is created on or after January 1, 2024, must report, within 30 days of creating the entity, the information set forth above for reporting companies and beneficial owners as well as information regarding company applicants.
  • For Existing Entities: Any reporting company created before January 1, 2024, must report by January 1, 2025:

EXEMPTIONS: The regulation contains 23 exemptions, and they generally relate to entities that are already subject to substantial governmental regulation, such as but not limited to banks, credit unions, insurance companies, etc.

For more information, please see the links below:

Law Firm: Article 1, Article 2,  Article 3

Bill Text

FinCen page

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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