What is the CTA's Final Rule?

The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) recently issued a Final Rule about the beneficial ownership reporting requirements through the Corporate Transparency Act (CTA).

The CTA, which went into effect in early 2022, requires that certain companies registered to do business in the United States report beneficial ownership information. The Act intends to make it more difficult to operate anonymous shell businesses for tax evasion or criminal purposes.

What is the Final Rule?

The Final Rule describes who must file the beneficial owner's report, what information must be reported, and when a report is due.

Under the rule, beneficial owners include any individual who, directly or indirectly, either exercises substantial control over a reporting company or owns or controls at least 25 percent of the ownership of interests of a reporting company.

Companies will be required to annually report the name, address, date of birth, and identifying number (non-expired driver’s license number, state ID card, or passport number) for each beneficial owner.

The Final Rule, which is effective January 1, 2024, requires that reporting companies created or registered before January 1, 2024, will have one year (until January 1, 2025) to file their initial reports.

Reporting companies created or registered after January 1, 2024, will have 30 days after creation or registration to file their initial reports. Once the initial report has been filed, both existing and new reporting companies will have to file updates within 30 days of a change in their beneficial ownership information.

Help is available

The business attorneys at O’Reilly Rancilio are available to answer your questions regarding the CTA regulations. For more information, please call 586-726-1000 or visit our website.