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Time sensitive points:

  • Entities formed in 2023 or before must file their initial CTA reports by January 1, 2025.
  • Entities formed in 2024 have 90 days from formation to file their initial CTA reports.
  • CTA reports are very easy to file. Our clients have overwhelmingly reported a positive experience preparing the reports themselves. Our Raines CTA Team can efficiently advise whether an entity is a reporting company or if a filing exemption applies and can help our clients identify beneficial owners. Although Raines does not prepare or file CTA reports, we can direct you to third-party vendors who can assist if you do not wish to do your own filing.

On January 1, 2024, major new federal regulations went into effect under the Corporate Transparency Act (“CTA”) which will require millions of US businesses to file reports with the Financial Crimes Enforcement Network (“FinCEN”). The CTA was enacted to assist law enforcement, intelligence and other government agencies in preventing criminals and terrorist organizations from using shell and front companies for their criminal enterprises.

In essence, businesses required to file reports under the CTA (known as “Reporting Companies”) must provide personal information about the individuals who ultimately own and control them (known as “Beneficial Owners”) on an ongoing basis. Reports filed under the CTA are known as “Beneficial Ownership Information Reports” (“BOIRs”). Don’t let the name fool you—Beneficial Owners may include officers, managers, trustees and board members of your entities!

Please note that while we are happy to help you evaluate your reporting obligations under the CTA, Raines Feldman Littrell LLP will not be preparing or filing BOIRs on behalf of clients. It will be necessary for our clients to prepare and file their own BOIRs. The vast majority of our clients have been happy to prepare and file BOIRs themselves, and have reported that the process of preparing and filing BOIRs via FinCEN’s official, free online CTA filing portal is faster and easier than they expected.

We encourage clients to use the pdf version of the official report instead of the online web form so they can keep a record of their filing in the event future updates are necessary. Alternatively, a number of third-party service providers offer BOIR preparation and filing services, such as CSC, CT Corporation Service, Cogency, FinCENReport.com and others (we do not endorse or recommend any third-party service provider).

Important Deadlines

  • Entities formed before January 1, 2024 have until January 1, 2025 to file their initial reports
  • Entities formed between January 1 and December 31, 2024 have 90 days after formation to file their initial reports
  • Entities formed January 1, 2025 or after have 30 days after formation to file their initial reports
  • Any updates or changes of information of a Beneficial Owner, such as an updated address, driver’s license expiration or identification number, or any changes in the BOIR itself, such as adding or removing Beneficial Owners, must be reported within 30 days of the change.

Failure to adhere to these deadlines may impose financial penalties on a Reporting Company and may subject a Beneficial Owner to jail time.

FinCEN ID

We encourage individuals who will be reported as a “Beneficial Owner” or “Company Applicant” in a BOIR to obtain a “FinCEN ID” via FinCEN’s official online FinCEN ID application. The application is simple and provides a FinCEN ID immediately. Using a FinCEN ID offers greater convenience, privacy and security by enabling individuals to provide their FinCEN ID to Reporting Companies in lieu of providing sensitive personal information such as their driver’s license or passport information. Additionally, having individuals’ FinCEN IDs makes it much easier for Reporting Companies to prepare BOIRs because they do not need to collect and report individuals’ sensitive personal information.

FinCEN’s Official CTA Resources

In addition to educating our clients about the CTA, we also recommend our clients update their applicable governing documents. Our corporate and real estate teams are available to assist in amending operating agreements, shareholder agreements and bylaws to include CTA language to compel members, shareholders, managers and officers to comply with CTA requirements.

For CTA questions, please reach out to your Raines attorney or e-mail a member of our CTA team at RainesCTA@raineslaw.com.

The Raines CTA Team:

Derek Dundas
Email: ddundas@raineslaw.com
Direct: 310-620-9338

David Madden
Email: dmadden@raineslaw.com
Direct: 312-704-2177

Jonathan Richter
Email: jrichter@raineslaw.com
Direct: 310-730-4375

Clare McKeown
Email: cmckeown@raineslaw.com
Direct: 312-625-9048

Johnathan Jianu
Email: jjianu@raineslaw.com
Direct: 424-343-8632