The Anti-Money Laundering Act of 2020, which is part of the National Defense Authorization Act for Fiscal Year 2021 and includes the Corporate Transparency Act (CTA), became law effective January 1, 2021.
In 2022, the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a rule implementing the beneficial ownership information (BOI) reporting requirements of the CTA. Unless exempt, the rule requires companies operating in the U.S., unless exempt, to file reports with FinCEN. In addition to information about the company itself, BOI reports must include details about each “beneficial owner,” individuals who exercise “substantial control” over the company (whether or not they are owners), and company applicants.
Entities formed before January 1, 2024 must file initial BOI reports by January 1, 2025. Entities formed after January 1, 2024 must file within 30 calendar days of formation. Failure to timely file the report can result in civil penalties of $500 a day and possible criminal penalties.
For more information, visit https://www.fincen.gov/boi.
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