New Reporting Requirements for LLC and S-Corporation Owners

A federal law called the Corporate Transparency Act (CTA) went into effect this year. The CTA introduces new reporting requirements aimed at promoting transparency in business ownership and preventing illicit financial activities. It's essential for individuals who have created Trusts, LLCs, S-Corps, and other legal entities to understand how this law affects them and what steps they need to take to comply.

What is the Corporate Transparency Act?

The Corporate Transparency Act (CTA) requires certain companies, known as “reporting companies,” to disclose information about their beneficial owners and company applicants. This information includes names, addresses, dates of birth, and photo IDs of each beneficial owner or company applicant. The report must be filed with the Financial Crimes Enforcement Network (FinCEN).

Key Terms to Understand:

Reporting Company

1. This refers to an entity which was created by filing a document with the Secretary of State or a similar government office, such as an LLC or S-Corporation.

Beneficial Owner

1. A beneficial owner is an individual who owns or controls at least 25% of the ownership interests in the reporting company. This includes individuals with significant control over the company's decisions.

Company Applicant

1. The individual who directly files the document that created the reporting company or is primarily responsible for directing the initial entity creation filing with the Secretary of State or other government office.

---

Important Deadlines Based on the Entity's Official Date of Creation

Prior to January 1, 2024	December 31, 2024
During 2024	Within 90 days of formation
After December 31, 2024	Within 30 days of formation