A limited-liability company (“LLC”) creates many tax benefits and protection from personal liability for many business owners. Before the Corporate Transparency Act, some of the many requirements to form an LLC included: the filing of the Articles of Organization, including the words “limited-liability company” or the abbreviation “L.L.C.” as the last word in the company’s name, establishing a registered agent, principal place of business, and mailing address, paying all necessary filing fees, and other requirements.
However, the Corporate Transparency Act added more requirements to the formation of an LLC. The Corporate Transparency Act requires companies to report information about their Beneficial Owners. Beneficial Owners are individuals who exercise substantial control over the entity or own or control 25% percent or more of the entity.
Starting January 1, 2024, businesses formed in 2024 must report their Beneficial Owners to the Financial Crimes Enforcement Network of the Department of Treasury within ninety (90) days of its creation. Business created on or after January 1, 2025, must submit their report within thirty (30) days of its creation. Additionally, companies formed before January 1, 2024, must report their Beneficial Owners in January of 2025. Failure to report your Beneficial Owners in accordance with the statute may result in fines as high as $10,000.00 and imprisonment for two (2) years.
To avoid any fines or imprisonment for failing to abide by the Corporate Transparency Act, you should contact an attorney to ensure your compliance and understanding of the law.
