Reminder: Businesses Must Act Now to Comply with CTA Reporting Requirements

The Corporate Transparency Act (CTA), which went into effect on January 1, 2024, will require owners of LLCs or small corporations to report additional identifying information on the entity and it’s owners to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). Violations of the CTA and noncompliance with reporting requirements can result in hefty penalties, so it is important to comply.

It is important to note:

• This also applies to individuals who exert control over certain aspects of the business, have beneficial interest in the business, and trusts that may have ownership in the business.
• If you are considering incorporating your business, now is the time. Entities organized before January 1, 2024 have until December 31, 2024 to comply with the CTA. While entities that organize after January 1, 2024, have only 90 days from the date of organizing/incorporating to comply.
• Additional guidance from FinCEN on July 8, 2024 now requires that any company that has been administratively dissolved by a Secretary of State’s office for not filing an annual report is required to submit a CTA report for that dissolved company if it would be possible to reinstate it. If no one else has taken the name of your dissolved company, it is always possible to reinstate regardless of how many years it has been since the dissolution. Therefore a CTA report for the dissolved company is required by the deadline of December 31, 2024. You are exempt from this new requirement only if you filed an official Statement of Termination with the Secretary of State’s office. KH is making you aware of this new requirement but will not file CTA reports on behalf of dissolved entities.