As a reminder, beneficial ownership interest reports required under the Corporate Transparency Act (CTA) are due within 90 days of formation for any entity formed on or after January 1, 2024, and by January 1, 2025, for all entities formed before January 1, 2024.  Reach out today if you have any questions about your filing.  Our previous coverage of the (CTA) emphasized the importance of compliance as businesses adapt to new reporting obligations. The landscape continues to evolve, and recent guidance from FinCEN brings new considerations to light for companies navigating this complex legislation. Notably, entities that exist on or after January 1, 2024, that are subsequently dissolved or cease to exist are still required to make an initial CTA filing. This development reinforces the need for ongoing vigilance in compliance efforts. FinCEN does not require additional reporting or updates for entities dissolved after their initial filing.

Key Takeaways from Our Previous Corporate Transparency Act Update

• Beneficial Ownership Reporting: Domestic and foreign entities operating in the U.S. must disclose beneficial ownership information to FinCEN, which is intended to reduce financial crimes such as money laundering.
• Definition of Beneficial Owner: A beneficial owner is anyone who either exercises substantial control over the company or owns at least 25% of its ownership interests.
• Initial Compliance Deadlines: Companies formed before January 1, 2024, have until January 1, 2025, to comply, while those formed on or after January 1, 2024, must file within 90 days of formation.
• Exemptions: Certain entities, such as publicly traded companies and some nonprofits, are exempt from reporting.
• Penalties for Non-Compliance: Willful violations of the CTA can lead to civil and criminal penalties, including fines of up to $10,000 and imprisonment of up to two years.
• Legal Challenges: A federal ruling has temporarily blocked CTA enforcement for certain plaintiffs, but the Department of the Treasury has appealed the decision. Businesses should remain cautious and continue to comply.

As we continue to monitor these updates, Bagchi Law remains committed to providing timely advice and guidance to help your business navigate these shifting requirements. Whether you are forming a new entity, dissolving an existing one, or managing ongoing compliance, we’re here to assist with strategic insights and proactive solutions. Don’t hesitate to contact us as these developments unfold, ensuring your business complies with the CTA.