Under the Corporate Transparency Act (the “CTA”), new beneficial ownership reporting requirements for U.S. companies are anticipated to go into effect as early as January 1, 2024. The CTA aims to reduce terrorist financing, money laundering, and other illicit activities by requiring corporations, limited liability companies, and other filing entities to register and disclose information relating to their owners, officers, and controlling persons with the Financial Crimes Enforcement Network (“FinCEN”).
Pursuant to the final rule on company reporting issued by FinCEN last year, starting on January 1, 2024, newly created entities that are considered a reporting company will be required to file their beneficial ownership information within 90 days after formation. Reporting companies created prior to January 1, 2024, will have until January 1, 2025 to file their beneficial ownership information with FinCEN. FinCEN has yet to issue a reporting form or create a reporting website.
Moreover, the CTA reporting requirements are facing pushback from at least one lawsuit and from within government. Because of the sheer volume of potential reports and lack of funding, FinCEN may delay the implementation date past January 1, 2024. FinCEN is anticipated to issue additional rules related to the CTA implementation later this year.
Clark Hill has created a CTA Task Force and is monitoring updates regarding the CTA’s rules and regulations. Clark Hill will be offering more communication to address any questions and/or concerns. Please stay tuned for more CTA content as Clark Hill continues our efforts to provide information and support for CTA compliance.