Effective January 1, 2024, the Corporate Transparency Act (Act) became a federal law affecting all corporations, limited liability companies, limited partnerships and other entities registered with the Secretary of State of the state of formation. All reporting entities formed prior to January 1, 2024 must register their beneficial ownership with the Financial Crimes Enforcement Network (FinCEN) database by before January 1, 2025. All reporting entities formed from and after January 1, 2024 must register their beneficial ownership with FinCEN within ninety (90) days after formation. Reporting entities formed from and after January 1, 2025 will have a period of thirty (30) days after formation to register their beneficial ownership with FinCEN.

FinCEN is a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat domestic and international money laundering, terrorist financing, and other financial crimes.

While challenges to the constitutionality of the Act are ongoing, the Act remains in full force and effect. We encourage entities to remain in compliance with the Act and proceed with registering their beneficial ownership with FinCEN. Failure to comply with the new FinCEN registration requirements may subject any person who willfully violates the reporting requirements to civil penalties of up to $500 for each day that the violation continues and also may be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000.

Of interest, the Act allows for 23 categories for exemption from having to report the beneficial ownership information to FinCEN. For more information regarding the Act or exemption from the Act, please contact Joan Berg at [email protected] or call (312) 6484-2300.