As part of the National Defense Authorization Act (“Act”), Congress recently passed the Corporate Transparency Act to modernize and reform the existing Anti-Money Laundering Act. Therefore, you/your entity may be required by law to report certain information.
What entities?
Entities that are required to report (“reporting company”) include: for-profit and non-profit corporations, limited liability companies, limited partnerships, and other similar entities that file with the respective secretary of state.
To whom must “information” be reported?
Reports must be filed with FinCEN (the United States Treasury Department’s Financial Crimes Enforcement Network). The reported data will not be publicly available.
When are the reports due?
Existing entities are expected to file their report within one year of the effective date of the final regulations, which are still pending. If the entity experiences an update in ownership or address, that information must be reported within of year of change. Newly formed entities are expected to file within 14 days of creation or registration.
What information must be provided?
Entities that qualify as a reporting company under the Act will be required to report a variety of data including:
- The company’s full name
- Any trade name or “doing business as” or “d/b/a” names
- Business street address
- Jurisdiction of formation
- IRS taxpayer ID
- Names, dates of birth, addresses, and identification numbers of beneficial owners.*
Is there a penalty for not complying?
Failure to file this report in a timely manner could lead to significant penalties including a civil penalty of up to $500 for each day a violation continues or has not been remedied, and/or a criminal penalty, up to a $10,000 fine and up to 2 years in prison per criminal violation of the Act.
Are there forms to report information?
Not yet. The Government is in the process of preparing the reporting forms. When the forms become available, our office can direct you to where the forms can be found. You can prepare and file the report yourself or you can hire us to do so. Our charge for filing the report for your company is $150. If you would like us to handle your filing or have any questions, please call the team at Koukol Johnson & Schmit at (402) 934-9499.
*A beneficial owner is a person who, directly or indirectly, either (1) exercises substantial control over the reporting company, or (2) owns or controls at least 25% of the ownership interests of the reporting company.