New guidance on the Corporate Transparency Act

The effectiveness of the federal Corporate Transparency Act (the “CTA”) has the potential of impacting every company doing business in the United States, whether formed in the United States or elsewhere. All businesses need to determine whether they are subject to the CTA reporting requirements and how to comply. Herrick K. Lidstone, Jr., partner at MSI member firm Burns, Figa & Will, P.C. provides further insight,

As has been mentioned before by me and others, the effectiveness of the federal Corporate Transparency Act (the “CTA”) has the potential of impacting every company doing business in the United States, whether formed in the United States or elsewhere.

While not every company will be a Reporting Company, and while many Reporting Companies will be exempt from the reporting requirements, all businesses need to determine whether they are subject to the CTA reporting requirements and how to comply. It remains amazing how few lawyers, accountants, and businesses are actually concerned about this compliance obligation which is backed by potential civil and criminal sanctions as set forth in the CTA.

In the weeks since publishing my December newsletter article, FinCEN released several frequently asked questions (“FAQs”) on the application of the federal Corporate Transparency Act (“CTA”). Attorneys and others trying to understand the CTA are likely to find several of these FAQs to be particularly relevant to them.

In addition, on December 22, 2023, New York by Governor Hochul signed the New York LLC Transparency Act (“NYLTA”) was signed into law in. The NYLTA will come into effect beginning December 21, 2024, and will impose certain beneficial ownership reporting obligations similar to those imposed by the CTA, but solely with respect to limited liability companies that are organized or registered to do business in New York and for which an exemption under the NYLTA does not apply.

Filing Your Beneficial Owner Information Report

As discussed in several prior articles for the Business Law Section newsletter, the federal CTA is now effective and the portal that the Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) has created is now available for filing Beneficial Owner Information Report (“BOIR”) and to obtain FinCEN Identification numbers (“FinCEN IDs”). In both cases, you must start at fincen.gov/boi which gives a number of options, including one that states “File”, offering a link to “File a report using the BOI E-Filing System”2 and to “Create a FinCEN ID (optional).”

The person making the filing may either file a PDF BOIR where the person may either: