Corporate Transparency Act (CTA) FAQs

This article is to provide for another notice regarding the Corporate Transparency Act and its reporting requirements. The deadlines are as follows:

• For companies created after January 1, 2024, you will have 90 days to file the report. Any entities created on or after January 1, 2025 must be reported within 30 days of creating the entity.
• For any companies already in existence, you must file their first report by January 1, 2025.

Following the initial report, if there are any corrections or changes in ownership, a new report must be filed within 30 days of the correction or change. Otherwise, there is no ongoing filing requirement. Some changes that would require a new filing include a change of address, change in senior management, or when an owner has died, and the business interests pass on to new beneficiaries.

This applies to all LLCs, Partnerships, Corporations, and Companies, unless your entity falls under one of the 23 exemptions. For information about whether your entity is exempt, please click here. It is crucial that you get your entities reported by the defined deadlines because the penalties are severe. In fact, failure to timely submit the reports can result in civil and criminal penalties. These penalties include civil penalties up to $500 per day, and criminal penalties in the form of fines up to $10,000, imprisonment of up to two years, or both. For further information about the CTA click here.

In order to make the reporting process very easy, we have a step-by-step guide attached to this article.

Please see some common Questions & Answers we have frequently received:

• Who is a “Company Applicant”?

A company applicant is defined as an individual who directly files or is primarily responsible for directing or controlling the filing of the document that creates or registers the reporting company. Such a definition would include lawyers that assist their clients with forming new businesses.

However, keep in mind that if your entity was created before January 1, 2024, then you can mark box #16 under the Company Applicant page of the form and that will allow you to bypass the page because you are not required to fill that part out. The Company Applicant page should only be filled out if your entity was created on or after January 1, 2024.

• Who are the beneficial owners of my Limited Partnership if my trust is the majority owner?

Because FinCEN is looking for individuals, you would not report your trust directly. Instead, you would report the individual names who are the beneficial owners of the trust. Typically, in our case, these are the clients directly. This would be the same answer if you have an LLC which is wholly owned by the Limited Partnership.

• Should I use my Social Security Number or an EIN for the tax ID when reporting my entity?

If the entity itself has an EIN, then the EIN is preferable. If the entity does not have an EIN because it is a single member entity or for other reasons, then the member’s social security can be used.

• What address should I use for my entity?

Your residential address is the one you should use for your entities, unless you specifically have a business address you would like to use.

• Do I have to report my entities?

As of right now, yes, especially if you are required to report your entities within the 90 day deadline. That being said, there have been some legal challenges against the CTA and its reporting requirements. This means that there is a possibility that the Act may be determined to be unconstitutional which could then dissolve the requirement to report your entities. Therefore, if you are hesitant to report your entities, and you have until January 1, 2025 to report, then you may want to consider waiting to report your entities to see if CTA requirements change before January 1, 2025.  For more information on the case that challenged the CTA, click here.

Please keep in mind that failure to report your entities based on your entity’s deadline can result in heft penalties and listed above.

• Is what I report public information?

No, any information you report regarding your entities will not be public information. BOI may be disclosed to the following categories of recipients: U.S. Federal Agencies Engaged in National Security, Intelligence, or Law Enforcement Activity, provided that the requested BOI is for use in furtherance of such activity.

• Do I need to include my DBA in my entity reporting?

Yes, if your entity has a DBA, then you are required to report that name under the required DBA field.