Effective January 1, 2024, the Corporate Transparency Act will require millions of companies incorporated in the United States to file, with the U.S. Department of the Treasury, a type of disclosure report containing information on the actual owners of shares and interests held in their respective companies, known as the Beneficial Ownership Information Report (BOI).

The Corporate Transparency Act (“CTA”) was enacted on January 1, 2021, as part of a broader anti-money laundering bill (“Anti-Money Laundering Act”), which took effect in 2020.
The CTA authorizes the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”), to collect data on the beneficial owners of shares and interests held in U.S.-incorporated companies and to disclose such data to government authorities and financial institutions, in order to facilitate the federal government’s efforts to prosecute financial crimes, subject to certain safeguards and controls.

FinCEN has therefore been tasked with creating and maintaining a national registry containing the details of the beneficial owners of companies designated as“reporting companies.”
This term refers to all corporations, limited liability companies, or other similar entities created—through the filing of the appropriate documentation— filed with the corporate registry offices of all states in the Confederation, including territories assigned by the federal government to Native American tribes, and to those companies that, although incorporated abroad, have nevertheless obtained permission to conduct their business activities within the United States.

Certain companies are, however, exempt from the above requirement, such as banks, credit unions, accounting firms, and large operating companies that employ more than 20 full-time employees and have annual gross receipts of $5 million. Consequently, all companies that fall under the definition of“reporting company”and to which none of the above exemptions apply will be required, effective January 1, 2024, to prepare the BOI for submission to FinCEN. This report must include the names of the “beneficial owners” and“company applicants.”

A “beneficial owner”is defined as an individual who holds at least 25% of the company’s capital or who, in any case, exercises direct or indirect control over the company. “Company applicant” refers to the entity that physically files the documentation necessary for the incorporation of the company. Only companies incorporated on or after January 1, 2024, will be required to indicate the name of the “company applicant” in their information statement, as will all foreign companies that have obtained permission to operate in Stanutin from January 1, 2024, onward. On this point, the regulations set a limit on the number of “company applicants” to be listed in the BOI, which may not, in any case, exceed two. Finally, for companies incorporated before January 1, 2024, the deadline for filing the BOI is January 1, 2025, while for those incorporated on or after January 1, 2024, the deadline is 30 days from the date of incorporation.

Failure to comply with the deadlines set forth in the relevant regulations for filing the required data or for providing information that is intentionally incomplete, inaccurate, or even false, could result in civil and criminal penalties, including a fine of $500 for each day the violation continues, or criminal penalties such as imprisonment for up to 2 years and/or a fine of up to $10,000. Senior executives of a company that fails to comply with the above obligation may be held liable for such a violation.