Client Alert

New Reporting Requirements Under the Corporate Transparency Act and the NY LLC Transparency Act

Effective January 1, 2024, the Corporate Transparency Act (the “CTA”) requires every corporation, LLC, or other entity created by the filing of a document with a Secretary of State to file a report disclosing information regarding its beneficial owners to the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”). Those businesses created in the United States and not exempt are referred to as “reporting companies” and are required to submit the information by filing a Business Ownership Information (“BOI”) Report with FinCEN.

A domestic reporting company created before January 1, 2024 has to provide information about the company and about its beneficial owners.  A domestic reporting company created on or after January 1, 2024 has to provide information about the company, its beneficial owners, and its company applicants.

Reporting companies subject to the CTA are required to provide the following information regarding the entity: (i) full legal name; (ii) trade names or d/b/a names; (iii) address of the entity; (iv) the jurisdiction of formation or registration; and (5) the federal taxpayer identification number.

For each beneficial owner, the reporting company must provide the following: (i) full legal name; (ii) birthdate; (iii) home address; (iv) an identifying number from a driver’s license, passport, or other approved documents; and (v) an image of the approved document that contains the identifying number. In lieu of (iv) and (v), an individual can apply for a FinCEN identifier number, after which the individual is permitted to use the identifier number on subsequent filings.

A domestic reporting company created before January 1, 2024 must file its initial BOI report by January 1, 2025.

A domestic reporting company created on or after January 1, 2024 and before January 1, 2025 must file a report within 90 calendar days of the date on which it receives actual or public notice that its creation has become effective.

A domestic reporting company created on or after January 1, 2025 must file a report within 30 calendar days of the date on which it receives actual or public notice that its creation has become effective.

According to Congress, this federal legislation providing for the collection of beneficial ownership information is needed to better enable efforts to counter money laundering, financing of terrorism, tax fraud and other illegal acts.

Similarly, on December 22, 2023, New York State enacted the New York LLC Transparency Act (“NY LLC Act”), which takes effect on December 21, 2024. This law mirrors the CTA but its disclosure requirements only apply to limited liability companies formed or authorized to do business in New York.

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