For Your Information: Overview & Resources on Filing Beneficial Ownership Information Under the Corporate Transparency Act

The Temple Chamber recently participated in a Legislative Update hosted by the Texas Association of Business, where insights were shared regarding Beneficial Ownership Information Reporting. As a result, we wanted to provide more information about this topic to our membership and business community.

On January 1, 2024, the Corporate Transparency Act (CTA) came into effect, bringing new rules [1] regarding beneficial ownership reporting for businesses. [2] This legislation aims to address concerns related to illicit financial activities, money laundering, and terrorism financing by enhancing transparency and disclosure requirements.

Beneficial ownership refers to individuals who ultimately own or control a legal entity, such as a corporation or LLC, and benefit from its operations or assets. Business entities subject to the CTA include S corporations, limited liability companies (LLCs), and similar entities created by filing with a secretary of state (SOS) or similar office. Some of the exempt entities include publicly traded companies, certain financial institutions, and charitable organizations. [3 & 4]

The required information for reporting beneficial ownership to FinCEN includes each beneficial owner's full legal name, date of birth, address, unique identification number from an acceptable document, and the filing entity's details. Businesses can file this information electronically through FinCEN's secure system. [5]

Non-compliance with the CTA can result in fines of up to $10,000 and potential criminal liability. [5] Understanding the CTA's requirements, including filing deadlines and the information needed, is crucial for businesses to ensure compliance and avoid penalties. [6]

For more detailed information about Beneficial Ownership Information Reporting and the Corporate Transparency Act (CTA), we encourage you to visit the following links.

Should you have further questions or need assistance navigating the requirements of the CTA, we recommend contacting an experienced Attorney or Certified Public Accountant specializing in regulatory compliance.

Links to More Information:

1. Federal Register/Vo. 87, No. 189/Friday, September 30, 2022/Rules and Regulations https://www.govinfo.gov/content/pkg/FR-2022-09-30/pdf/2022-21020.pdf
   
   
2. https://www.fincen.gov/boi
   
   
3.  https://www.fincen.gov/beneficial-ownership-information-reporting-rule-fact-sheet
   
   
4. https://fincen.gov/boi-faqs#C_2
   
   
5. https://fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf
   
   
6. https://www.fincen.gov/sites/default/files/shared/BOI-Informational-Brochure-April-2024.pdf