{"id":2314,"date":"2024-05-16T07:00:06","date_gmt":"2024-05-16T07:00:06","guid":{"rendered":"https:\/\/investmentlawyers.com\/cta\/?page_id=2314"},"modified":"2024-09-10T10:11:40","modified_gmt":"2024-09-10T10:11:40","slug":"regulation","status":"publish","type":"page","link":"https:\/\/investmentlawyers.com\/cta\/regulation\/","title":{"rendered":"Regulation"},"content":{"rendered":"\t\t
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Corporate Transparency Act<\/h1>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Regulation Summary<\/h5>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Corporate Transparency Act compliance is incredibly important. The penalties for failure to report complete or updated information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and\/or a fine of up to $10,000. Senior management that fails to file a required BOI report may be held accountable for that failure. <\/p>\n

The following guide was created by FinCEN and includes compliance information if you chose to maintain your own filings for the CTA. If you use our implementation portal, we help ensure that you maintain compliance now and in the future.<\/p>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Introduction<\/a><\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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FinCEN is publishing this Small Entity Compliance Guide (Guide)1 to help small entities comply with the requirements of the Beneficial Ownership Information Reporting Rule (referenced in this Guide as the Reporting Rule). In particular, small entities may have newrequirements under the Reporting Rule. FinCEN is committed to ensuring that the small business community and other reporting companies have the tools they need to comply with the new requirements, and that the process is as smooth and streamlined as possible. FinCEN\nis striving to reduce the burden on small businesses by providing comprehensive guidance and communicating information about the reporting requirements in plain language<\/p>\n\n

The Reporting Rule requires certain entities to file beneficial ownership information (BOI) reports (referenced in this Guide as BOI reports or reports) to FinCEN. Reports contain information about the entity itself and two categories of individuals:<\/p>\n

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  1. Beneficial owners<\/strong><\/li>\n \t
  2. Company applicants<\/strong><\/li>\n<\/ol>\n

    These terms will be described in detail later in this Guide, but in general, a beneficial owner is an individual who owns or controls at least 25 percent of a company or has substantial control over the company, and a company applicant is an individual who directly files or is primarily responsible for the filing of the document that creates or registers the company<\/p>\n\n

    The\u00a0Reporting Rule<\/a><\/u>,2<\/sup> issued on September 30, 2022, implements Section 6403 of the CorporateTransparency Act. The rule describes who must file BOI reports, what information they must provide, and when they must file the reports.<\/p>\n\n

    The Reporting Rule is found at 1010.380 in title 31 of the Code of Federal Regulations (CFR). An electronic version is also available through FinCEN\u2019s website. Specific sections\nof the Reporting Rule are cited throughout this Guide using the citation \u201c1010.380 [paragraph number].\u201d Appendix A to this Guide provides an index of where this Guide cites to the different parts of the regulation. This Guide covers all the provisions of 1010.380.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    1. This Guide satisfies FinCEN\u2019s obligations under Section 212 of the Small Business Regulatory Enforcement
      Fairness Act of 1996, amended by Section 8302 of the Fair Minimum Wage Act of 2007. See Small Business Regulatory Enforcement Fairness Act of 1996, Pub. L. No. 104-121, \u00a7 212, 110 Stat. 857, 858 (1996), available at\u00a0      www.govinfo.gov\/content\/pkg\/PLAW-104publ121\/pdf\/PLAW-104publ121.pdf<\/a><\/u>. See Fair Minimum Wage Act of 2007, Pub. L. No. 110-28, \u00a7 8302, 121 Stat. 112, 204 (2007), available at\u00a0www.govinfo.gov\/content\/pkg\/PLAW-110publ28\/pdf\/PLAW-110publ28.pdf<\/a><\/u>. This Guide summarizes and explains the Reporting Rule but is not a substitute for the Reporting Rule. The language of the Reporting Rule itself, not this Guide, establishes a person\u2019s legal obligations.<\/li>
    2. All hyperlinks are current as of the date of the Guide\u2019s publication.<\/li><\/ol>

      Starting on January 1, 2024, BOI reports must be filed electronically using FinCEN\u2019s secure filing system. FinCEN will store BOI reports in a centralized database and only share this information with authorized users for purposes specified by law. The database will use rigorous information security methods and controls typically used in the Federal government to protect non-classified yet sensitive information systems at the highest security level.<\/p>

      When do I need to file a report?<\/u><\/h5>