Corporate Transparency Act
Have you heard of the new corporate reporting required for private companies - the Corporate Transparency Act of 2024?
The Corporate Transparency Act of 2024 (CTA) requires private companies (corporation or LLC) formed before January 1, 2024, to comply with CTA reporting requirements by January 1, 2025. Companies formed after January 1, 2024, have even tighter reporting deadlines. If there are changes to basic information, owners, or status as a reporting company, an updated report must be filed within 30 days of the change.
The CTA requires reporting companies to disclose information to the United States Treasury about their owners and persons who exercise control using a beneficial owner information (“BOI Report”). Non-compliance may subject required filers to civil and/or criminal penalties.
Some good news: There is a list of 23 exemptions! Since the Act is really targeting smaller companies, the most common exemption is for “large operating companies”. To qualify for this exemption, the company must:
Have more than 20 full-time employees in the US – 30/hours per week or 130/hours per month; and
Have an operating presence at a physical office in the US ( the office must be owned or leased, but not shared with non-affiliates, so shared-space arrangements with non-affiliated companies would not meet this requirement); and
Report more than $5 million in gross receipts or sales in the prior year (Note: There are extensive additional parameters for this last requirement.)
Other exemptions include: public companies (securities reporting issues, investment companies and advisers, and venture capital fund advisers.
For more information, the following link will guide from FinCEN on BOI reporting: https://www.fincen.gov/boi-faqs#D_2
Another valuable resource to learn more about the new CTA reporting requirement:
If you need help running reports for CTA ownership reporting, please reach out to your EPS primary contact.
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