Attention LLC, corporation, and limited partnership owners! The Corporate Transparency Act (CTA) created a new and very different reporting obligation.
The CTA is too complex to explain in a short post, but here’s what you need to know and do now to prepare:
Consult your business attorney to assess reporting implications for every legal entity you're associated with. There are 23 types of entities that are exempt from reporting, but don’t assume that your attorney has enough information to make this evaluation just because the attorney helped register the entity.
If any LLCs or LLPs are part of your estate plan, contact your estate planning attorney to review it.
Assign a CTA compliance lead within your company.
Establish a process for collecting and securing required information, ensuring prompt filing and updates.
Amend your operating and shareholder agreements to require submission of information and address non-compliance. (BTW, this is a great opportunity to review those agreements for any other changes that may be needed!)
Collect relevant documentation for owners with at least 25% ownership or non-owners exerting substantial control. Seek legal expertise on "substantial control" criteria.
Here’s what’s required for the reports:
Full name
Date of birth
Current Home Address (no PO Box)
Government identification document (such as passport or driver’s license)
You will not receive reminders from the government; you are just expected to comply.
New companies created on or after January 1, 2024, must file a report within 30 days of entity formation. Pre-existing companies have until January 1, 2025, to file the initial report. Updates must be filed for any changes to the submitted information.
Don't be caught off guard. Prepare for CTA's reporting rules to keep your business compliant and thriving.