Recent Updates on 2024 FinCEN New Beneficial Ownership Reporting Obligations

In January 2024, the new Corporate Transparency Act (CTA) came into effect, introducing beneficial ownership reporting requirements. Lawmakers expressed concerns about small businesses being unaware of these requirements during a hearing on July 9, 2024.

Treasury Secretary Janet Yellen defended the current timeframe, stating that most businesses have until the end of the year to comply and that the process is simple. She also clarified that the CTA penalizes willful violations of the law, prioritizing intentional non-compliance over inadvertent mistakes by small businesses.

Some of the key changes to note include:

1. Businesses must report information about individuals who own or control a company.
2. Existing businesses have until January 1, 2025, to comply.
3. New businesses in 2024 must file within 90 days, while those created in 2025 or later have 30 days.

The CTA imposes substantial penalties for non-compliance with its beneficial ownership reporting requirements:

1. Businesses that fail to comply with the reporting requirements can face substantial fines. Violators may be subject to civil penalties of up to $500 per day that the violation continues.
2. Willful violators of the CTA reporting requirements may also face criminal penalties, which can include fines up to $10,000 and/or imprisonment for up to two years.

Complying with these reporting requirements is crucial for businesses to avoid severe penalties and ensure they do not suffer damage that could affect future business operations. Contact our Global Business Services team with questions on these requirements or any other international tax issue.