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Insights Insights
| 1 minute read

CTA for Small Businesses -- 90-Day Clock Is Running for Newly Formed Entities

2024 is now a month old, meaning that the US is a month into the requirements of the new Corporate Transparency Act.  As a reminder, the CTA is a federal law requiring most small businesses to identify their “beneficial owners” and other data in a “BOI report” to the federal law enforcement agency FinCEN. Determining whether the company is covered by the law, whether it is exempt from filing a BOI report or not, and who are the beneficial owners can be a complex and time-consuming exercise. 

Why It Matters

Non-exempt companies formed before 2024 have until 12/31/2024 to file their BOI reports with FinCEN. New non-exempt companies – those formed since the beginning of the year – have a much shorter time to file (90 days from formation).  In addition, those new companies are required to identify not just their beneficial owners but also their “company applicants” when filing their BOI reports. For any business owner who has created any entity this year, the clock is now running. Because the exercise of identifying beneficial owners and company applicants can be complicated and is highly fact-specific, we encourage business owners to start this process of analyzing their reporting requirements now.  

Non-compliance carries the risk of both civil and criminal fines as well as jail time – for the company itself and for its beneficial owners.  

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corporate transparency act, emerging companies, corporate and business, hill_mitzi, insights